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Full text of "Business Ethics"

Business Ethics 



Collection Editor: 

William Frey 



Business Ethics 



Collection Editor: 

William Frey 

Authors: 

Jose A. Cruz-Cruz 
William Frey 



Online: 

< http://cnx.Org/content/coll0491/l.9/ > 



CONNEXIONS 
Rice University, Houston, Texas 



This selection and arrangement of content as a collection is copyrighted by William Prey. It is licensed under the 

Creative Commons Attribution 2.0 license (http://creativecommons.Org/licenses/by/2.0/). 

Collection structure revised: January 2, 2009 

PDF generated: October 18, 2010 

For copyright and attribution information for the modules contained in this collection, see p. 238. 



Table of Contents 

1 Ethical Leadership 

1.1 Theory Building Activities: Mountain Terrorist Exercise 1 

1.2 Theory-Building Activities: Virtue Ethics 5 

1.3 Moral Exemplars in Business and Professional Ethics 12 

1.4 Ethics of Team Work 17 

2 Ethical Decision-Making 

2.1 Ethical Rights for Working Engineers and Other Professionals 23 

2.2 Three Frameworks for Ethical Decision Making and Good Computing Reports 29 

2.3 Values-Based Decision-Making in Gilbane Gold 40 

2.4 Socio-Technical Systems in Professional Decision Making 44 

3 CSR (Corporate Social Responsibility) 

3.1 A Short History of the Corporation 53 

3.2 Moral Ecologies in Corporate Governance 61 

3.3 Three Views of CSR (Corporate Social Responsibility) 70 

3.4 Theory Building Activities: "Responsibility and Incident at Morales" 80 

3.5 Ethical Issues in Risk Management for Business 88 

4 CG (Corporate Governance) 

4.1 Different Approaches to Corporate Governance 99 

4.2 Developing Ethics Codes and Statements of Values Ill 

4.3 Pirate Code for Engineering Ethics 122 

4.4 Corporate Ethics Compliance Officer Report 128 

4.5 Being an Ethical Job Candidate 132 

5 Business Ethics Case Studies 

5.1 Biomatrix Case Exercises - Student Module 143 

5.2 Gray Matters for the Hughes Aircraft Case 165 

5.3 Case Analysis Module: Therac-25 174 

5.4 Toysmart Case Exercises - Student Module 179 

5.5 Ethics and Laptops: Identifying Social Responsibility Issues in Puerto Rico 201 

5.6 Case Analysis and Presentation: Machado 203 

6 Business Ethics Bowl 

6.1 Practical and Professional Ethics Bowl Activity: Follow-Up In-Depth Case Anal- 
ysis 211 

6.2 Ethics Bowl: Cases and Score Sheets 220 

7 Course Procedures 

7.1 Rubrics for Exams and Group Projects in Ethics 225 

7.2 Realizing Responsibility Through Class Participation 229 

Index 236 

Attributions 238 



IV 



Chapter 1 

Ethical Leadership 



1.1 Theory Building Activities: Mountain Terrorist Exercise 1 

1.1.1 Module Introduction 

This module poses an ethical dilemma, that is, a forced choice between two bad alternatives. Your job is to 
read the scenario and choose between the two horns of the dilemma. You will make your choice and then 
justify it in the first activity. In the second activity, you will discuss your choice with others. Here, the 
objective is to reach consensus on a course of action or describe the point at which your group's progress 
toward consensus stopped. The Mountain Terrorist Exercise almost always generates lively discussion and 
helps us to reflect on of our moral beliefs. Don't expect to reach agreement with your fellow classmates 
quickly or effortlessly. (If you do, then your instructor will find ways of throwing a monkey wrench into the 
whole process.) What is more important here is that we learn how to state our positions clearly, how to 
listen to others, how to justify our positions, and how to assess the justifications offered by others. In other 
words, we will all have a chance to practice the virtue of reasonableness. And we will learn reasonableness 
not when it's easy (as it is when we agree) but when it becomes difficult (as it is when we disagree). 

The second half of this module requires that you reflect carefully on your moral reasoning and that of 
your classmates. The Mountain Terrorist Exercise triggers the different moral schemas that make up our 
psychological capacity for moral judgment. Choosing one horn of the dilemma means that you tend to favor 
one kind of schema while choosing the other horn generally indicates that your favor another. The dominant 
moral theories that we will study this semester provide detailed articulations and justifications of these moral 
schemas. Reflecting on your choice, the reasons for your choice, and how your choice differs from that of 
your classmates will help you get started on the path of studying and effectively utilizing moral theory. 

The following scenario comes originally from the philosopher, Bernard Williams. It is also presented in 
introductory ethics textbooks (such as Geoffrey Thomas' An Introduction to Ethics). The first time this 
module's author became aware of its use in the classroom was in a workshop on Agriculture Ethics led by 
Paul Thompson, then of Texas A&M University, in 1992. 

1.1.2 Moral Theories Highlighted 

1. Utilitarianism: the moral value of an action lies in its consequences or results 

2. Deontology: the moral value of an action lies, not in its consequences, but in the formal characteristics 
of the action itself. 

3. Virtue Ethics: Actions sort themselves out into virtuous or vicious actions. Virtuous actions stem from 
a virtuous character while vicious actions stem from a vicious or morally flawed character. Who we 
are is reveals through what we do. 



1 This content is available online at <http://cnx.Org/content/ml3764/l.ll/>. 

1 



CHAPTER 1. ETHICAL LEADERSHIP 



1.1.3 Mountain Terrorist Scenario 



You are in a remote mountain village. A group of terrorists has lined up 20 people from the village; they 
plan on shooting them for collaborating with the enemy. Since you are not from the village, you will not be 
killed. Taking advantage of your position, you plead with the terrorists not to carry out their plan. Finally, 
you convince the leader that it is not necessary to kill all 20. He takes a gun, empties it of all its bullets 
except one, and then hands it to you. He has decided to kill only one villager to set an example to the rest. 
As an honored guest and outsider, you will decide who will be killed, and you will carry out the deed. The 
terrorists conclude with a warning; if you refuse to kill the villager, then they will revert back to the original 
plan of killing all 20. And if you try any "funny business," they will kill the 20 villagers and then kill you. 
What should you do? 

Your Options 

1. Take the gun, select a villager, and kill him or her. 

2. Refuse the terrorists' offer and walk away from the situation. 

Spanish Translation by Dr. Halley Sanchez 

El Terrorista de la Montana Tu eres un antropologo que por un mes ha estado viviendo con y observando (o 
sea, estudiando) a los residents de una aldea en una area remota montanoza de un pais en America Latina. 
El dia que te dispone irte de la aldea, aprece un grupo de hombres armados que reunen a los aldeanos y 
les anuncian que se han enterado de que ellos han estado cooperando con el gobierno represivo y que, como 
lection, han de ejecutar viente de ellos. El lider de los terroristas te mira y te dice que tu te puedes ir, 
ya que no estas involucardo en la lucha patriotica y que ellos no estan en la costumbre de tomar rehenes 
extranjeros. Debido a que te da la impresion de que el lider de los supuestos patriotas (terroristas?) es un 
hombre educado, tu te atreves tratar de razonar con el. Le explica que llevas un mes en la aldea y que los 
aldeanos no han cooperado de forma volutaria con el gobierno. Si, por supuesto, las tropas del gobierno 
pasaron por la aldea y confiscaron algunas provisiones, pero los aldeanos no se las dieron libremente sino que 
estaban indefenso y no podieron prevenir que le confiscaran las mismas. El lider piensa un tiempo y te dice 
que por tu ser forastero y obviamente un antropologo estudioso, te va a dar el benificio de la duda, y que por 
tanto no van a ejecutar viente aldeanos. Pero dado que la lucha patriotica esta en un proceso critico y que 
la aldea si le proveyo provisiones al gobierno, por el bien de la lucha patriotica y el bien de la humanidad, 
es menester darle una lection a la aldea. Asi que tan solo han de ejecutar un aldeano. Mas, como huesped, 
tu has de escoger quien ha de morir y tu has de matarlo tu mismo. Te da una pistola con una sola bala y te 
dice que proceda, mientras que a la vez te advierte que de tratar algo heroico, te ejecutaran inmediatamente 
y procederan a ejecutar a los viente aldeanos como dijeron al comienzo. Tu eres el antropologo. /.Que haras? 
Activity 1 

In a short essay of 1 to 2 pages describe what you would do if you were in the position of the tourist. Then 
justify your choice. 
Activity 2 

Bring your essay to class. You will be divided into small groups. Present your choice and justification to 
the others in your group. Then listen to their choices and justifications. Try to reach a group consensus on 
choice and justification. (You will be given 10-15 minutes.) If you succeed present your results to the rest of 
the class. If you fail, present to the class the disagreement that blocked consensus and what you did (within 
the time limit) to overcome it. 

1.1.4 Taxonomy of Ethical Approaches 

There are many ethical approaches that can be used in decision making. The Mountain Terrorist Exercise 
is based on an artificial scenario designed to separate these theoretical approaches along the lines of the 
different "horns" of a dilemma. Utilitarians tend to choose to shoot a villager "in order to save 19." In other 
words they focus their analysis on the consequences of an action alternative and choose the one that produces 
the least harm. Deontologists generally elect to walk away from the situation. This is because they judge an 
action on the basis of its formal characteristics. A deontologist might argue that killing the villager violates 



natural law or cannot be made into a law or rule that consistently applies to everybody. A deontologist 
might say something like, "What right do I have to take another person's life?" A virtue ethicists might try 
to imagine how a person with the virtue of courage or integrity would act in this situaiton. (Williams claims 
that choosing to kill the villager, a duty under utilitarianism, would undermine the integrity of a person who 
abhorred killing.) 

Table Connecting Theory to Domain 

1. Row 1: Utilitarianism concerns itself with the domain of consequences which tells us that the moral 
value of an action is "colored" by its results. The harm/beneficence test, which asks us to choose the 
least harmful alternative, encapsulates or summarizes this theoretical approach. The basic principle 
of utilitarianism is the principle of utility: choose that action that produces the greatest good for the 
greatest number. Cost/benefits analysis, the Pareto criterion, the Kalder/Hicks criterion, risk/benefits 
analysis all represent different frameworks for balancing positive and negative consequences under 
utilitarianism or consequentialism. 

2. Row 2: Deontology helps us to identify and justify rights and their correlative duties The reversibility 
test summarizes deontology by asking the question, "Does your action still work if you switch (=reverse) 
roles with those on the receiving end? "Treat others always as ends, never merely as means," the 
Formula of End, represents deontology's basic principle. The rights that represent special cases of 
treating people as ends and not merely as means include (a) informed consent, (b) privacy, (c) due 
process, (d) property, (e) free speech, and (f) conscientious objection. 

3. Row 3: Virtue ethics turns away from the action and focuses on the agent, the person performing the 
action. The word, "Virtue," refers to different sets of skills and habits cultivated by agents. These skills 
and habits, consistently and widely performed, support, sustain, and advance different occupational, 
social, and professional practices. (See Maclntyre, After Virtue, and Solomon, Ethics and Excellence, 
for more on the relation of virtues to practices.) The public identification test summarizes this ap- 
proach: an action is morally acceptable if it is one with which I would willingly be publicly associated 
given my moral convictions. Individual virtues that we will use this semester include integrity, justice, 
responsibility, reasonableness, honesty, trustworthiness, and loyalty. 



Covering All the Bases 


Ethical Dimension 


Covering Ethical 


Encapsulating 


Basic Principles 


Application or 




Approach 


Ethical Test 




Bridging Tools 


Consequences 


Utilitarianism 


Harm/Beneficence 


Principle of Util- 


Benefit & cost 






(weigh harms 


ity: greatest good 


comparisonUt ility 






against benefits) 


for greatest num- 
ber 


Maximization 


Formal Character- 


Deontology (Duty- 


Reversibility (test 


Categorical Im- 


Free & Informed 


istics of Act 


based, rights- 


by reversing roles 


perativeFormula 


Consent, Privacy, 




based, natural 


between agent and 


of EndAutonomy 


Property, Due 




law, social con- 


object of action) 




Process, Free 




tract) 






Speech, Conscien- 
tious objection 








continued on 


next page 



CHAPTER 1. ETHICAL LEADERSHIP 



Skills and 


habits 


Virtue Ethics 


Public Identifica- 


Virtues are means 


Integrity, justice, 


cultivated 


by 




tion (impute moral 


between extremes 


responsibility, rea- 


agent 






import of action to 


with regard to 


sonableness, hon- 








person of agent) 


agent and ac- 
tionVirtues are 
cultivated disposi- 
tions that promote 
central community 
values 


esty, trustworthi- 
ness, loyalty 



Table 1.1 



1.1.5 Comments on the Relation Between Ethical Approaches 

The Mountain Terrorist Exercise has, in the past, given students the erroneous idea that ethical approaches 
are necessarily opposed to one another. As one student put it, "If deontology tells us to walk away from 
the village, then utilitarianism must tell us to stay and kill a villager because deontology and utilitarian- 
ism, as different and opposed theories, always reach different and opposed conclusions on the actions they 
recommend." The Mountain Terrorist dilemma was specially constructed by Bernard Williams to produce 
a situation that offered only a limited number of alternatives. He then tied these alternatives to different 
ethical approaches to separate them precisely because in most real world situations they are not so readily 
distinguishable. Later this semester, we will turn from these philosophical puzzles to real world cases where 
ethical approaches function in a very different and mostly complimentary way. As we will see, ethical ap- 
proaches, for the most part, converge on the same solutions. For this reason, this module concludes with 3 
meta-tests. When approaches converge on a solution, this strengthens the solution's moral validity. When 
approaches diverge on a solution, this weakens their moral validity. A third meta-test tells us to avoid fram- 
ing all ethical problems as dilemmas (=forced choices between undesirable alternatives) or what Carolyn 
Whitbeck calls "multiple-choice" problems. You will soon learn that effective moral problem solving requires 
moral imagination and moral creativity. We do not "find" solutions "out there" ready made but design them 
to harmonize and realize ethical and practical values. 

Meta- Tests 

• Divergence Test: When two ethical approaches differ on a given solution, then that difference counts 
against the strength of the solution. Solutions on which ethical theories diverge must be revised towards 
convergence. 

• Convergence Test: Convergence represents a meta-test that attests to solution strength. Solutions on 
which different theoretical approaches converge are, by this fact, strengthened. Convergence demon- 
strates that a solution is strong, not just over one domain, but over multiple domains. 

• Avoid Framing a Problem as a Dilemma. A dilemma is a no-win situation that offers only two al- 
ternatives of action both of which are equally bad. (A trilemma offers three bad alternatives, etc.) 
Dilemmas are better dissolved than solved. Reframe the dilemma into something that admits of more 
than two no-win alternatives. Dilemma framing (framing a situation as an ethical dilemma) discour- 
ages us from designing creative solutions that integrate the conflicting values that the dilemma poses 
as incompatible. 



1.1.6 Module Wrap-Up 

1. Reasonableness and the Mountain Terrorist Exercise. It may seem that this scenario is the last 
place where the virtue of reasonableness should prevail, but look back on how you responded to those 
of your classmates who chose differently in this exercise and who offered arguments that you had not 
initially thought of. Did you "listen and respond thoughtfully" to them? Were you "open to new ideas" 



even if these challenged your own? Did you "give reasons for" your views, modifying and shaping them 
to respond to your classmates' arguments? Did you "acknowledge mistakes and misunderstandings" 
such as responding critically and personally to a classmate who put forth a different view? Finally, when 
you turned to working with your group, were you able to "compromise (without compromising personal 
integrity)"? If you did any or all of these things, then you practiced the virtue of reasonableness as 
characterized by Michael Pritchard in his book, Reasonable Children: Moral Education and Moral 
Learning (1996, University of Kansas Press, p. 11). Congratulate yourself on exercising reasonableness 
in an exercise designed to challenge this virtue. You passed the test. 

2. Recognizing that we are already making ethical arguments. In the past, students have made 
the following arguments on this exercise: (a) I would take the gun and kill a villager in order to 
save nineteen; (b) I would walk away because I don't have the right to take another's life; (c) While 
walking away might appear cowardly it is the responsible thing to do because staying and killing a 
villager would make me complicit in the terrorists' project. As we discussed in class, these and other 
arguments make use of modes of thought captured by ethical theories or approaches. The first employs 
the consequentialist approach of utilitarianism while the second makes use of the principle of respect 
that forms the basis of our rights and duties. The third works through a conflict between two virtues, 
courage and responsibility. This relies on the virtue approach. One accomplishment of this exercise 
is to make you aware of the fact that you are already using ethical arguments, i.e., arguments that 
appeal to ethical theory. Learning about the theories behind these arguments will help you to makes 
these arguments more effectively. 

3. Results from Muddy Point Exercises The Muddy Point Exercises you contributed kept coming 
back to two points, (a) Many of you pointed out that you needed more information to make a decision 
in this situation. For example, who were these terrorists, what causes were they fighting for, and were 
they correct in accusing the village of collaborating with the enemy? Your request for more information 
was quite appropriate. But many of the cases we will be studying this semester require decisions in the 
face of uncertainty and ignorance. These are unavoidable in some situations because of factors such as 
the cost and time of gathering more information. Moral imagination skillfully exercised can do a lot 
to compensate when all of the facts are not in. (b) Second, many of you felt overly constrained by the 
dilemma framing of the scenario. Those of you who entered the realm of "funny business" (anything 
beyond the two alternatives of killing the villager or walking away) took a big step toward effective 
moral problem solving. By rejecting the dilemma framing of this scenario, you were trying to reframe 
the situation to allow for more-and more ethically viable-alternatives. Trying to negotiate with the 
Terrorists is a good example of reframing the scenario to admit of more ethical alternatives of action 
than killing or walking away. 

4. Congratulations on completing your first ethics module! You have begun recognizing and practicing 
skills that will help you to tackle real life ethical problems. (Notice that we are going to work with 
"problems" not "dilemmas".) We will now turn, in the next module, to look at those who managed 
to do good in the face of difficulty. Studying moral exemplars will provide the necessary corrective to 
the "no-win" Mountain Terrorist Exercise. 



1.2 Theory-Building Activities: Virtue Ethics 2 

Based on material presented by Chuck Huff (St. Olaf College) and William Frey at the Association for 
Practical and Professional Ethics in 2005 at San Antonio, TX. Preliminary versions were distributed during 
this presentation. 



2 This content is available online at <http://cnx.Org/content/ml3755/l.13/>. 



CHAPTER 1. ETHICAL LEADERSHIP 



1.2.1 Module Introduction 



This module uses materials being prepared for Good Computing: A Virtue Approach to Computer Ethics, 
to set up an exercise in which you will identify and spell out virtues relevant to your professional discipline. 
After identifying these virtues, you will work to contextualize them in everyday practice. Emphasis will be 
placed on the Aristotelian approach to virtues which describes a virtue as the disposition toward the mean 
located between the extremes of excess and defect. You will also be asked to identify common obstacles 
that prevent professionals from realizing a given virtue and moral exemplars who demonstrate consistent 
success in realizing these virtues and responding to obstacles that stand in the way of their realization. In a 
variation on this module you could be asked to compare the virtues you have identified for your profession 
with virtues that belong to other moral ecologies such as those of the Homeric warrier. 

1.2.2 Three Versions of Virtue Ethics: Virtue 1, Virtue 2, and Virtue 3 

Virtue ethics has gone through three historical versions. The first, Virtue 1, was set forth by Aristotle in 
ancient Greece. While tied closely to practices in ancient Greece that no longer exist today, Aristotle's 
version still has a lot to say to us in this day and age. In the second half of the twentieth century, British 
philosophical ethicists put forth a related but different theory of virtue ethics (virtue 2) as an alternative to 
the dominant ethical theories of utilitarianism and deontology. Virtue 2 promised a new foundation of ethics 
consistent with work going on at that time in the philosophy of mind. Proponents felt that turning from the 
action to the agent promised to free ethical theory from the intractable debate between utilitarianism and 
deontology and offered a way to expand scope and relevance of ethics. Virtue 3 reconnects with Aristotle 
and virtue 1 even though it drops the doctrine of the mean and Aristotle's emphasis on character. Using 
recent advances in moral psychology and moral pedagogy, it seeks to rework key Aristotelian concepts in 
modern terms. In the following, we will provide short characterizations of each of these three versions of 
virtue ethics. 

1.2.3 Virtue 1: Aristotle's Virtue Ethics 

• Eudaimonia. Happiness, for Aristotle, consists of a life spent fulfilling the intellectual and moral 
virtues. These modes of action are auto-telic, that is, they are self-justifying and contain their own 
ends. By carrying out the moral and intellectual virtues for a lifetime, we realize ourselves fully as 
humans. Because we are doing what we were meant to do, we are happy in this special sense of 
eudaimonia. 

• Arete. Arete is the Greek word we usually translate as "virtue". But arete is more faithfully translated 
as excellence. For Aristotle, the moral and intellectual virtues represent excellences. So the moral life 
is more than just staying out of trouble. Under Aristotle, it is centered in pursuing and achieving 
excellence for a lifetime. 

• Virtue as the Mean. Aristotle also characterizes virtue as a settled disposition to choose the mean 
between the extremes of excess and defect, all relative to person and situation. Courage (the virtue) 
is the mean between the extremes of excess (too much courage or recklessness) and defect (too little 
courage or cowardice). Aristotle's claim that most or all of the virtues can be specified as the mean 
between extremes is controversial. While the doctrine of the mean is dropped in Virtue 2 and Virtue 3, 
we will still use it in developing virtue tables. (See exercise 1 below.) You may not find both extremes 
for the virtues you have been assigned but make the effort nonetheless. 

• Ethos. "Ethos" translates as character which, for Aristotle, composes the seat of the virtues. Virtues 
are well settled dispositions or habits that have been incorporated into our characters. Because our 
characters are manifested in our actions, the patterns formed by these over time reveal who we are. 
This can be formulated as a decision-making test, the public identification test. Because we reveal 
who we are through our actions we can ask, when considering an action, whether we would care to 
be publicly identified with this action. "Would I want to be publicly known as the kind of person 
who would perform that kind of action? Would I, through my cowardly action, want to be publicly 



identified as a coward? Would I, through my responsible action, want to be publicly identified as a 
responsible person? Because actions provide others with a window into our characters, we must make 
sure be sure that they portray us as we want to be portrayed. 

Aisthesis of the Phronimos. This Greek phrase, roughly translated as the perception of the morally 
experienced agent, reveals how important practice and experience are to Aristotle in his conception 
of moral development. One major difference between Aristotle and other ethicists (utilitarians and 
deontologists) is the emphasis that Aristotle places on developing into or becoming a moral person. 
For Aristotle, one becomes good by first repeatedly performing good actions. So morality is more 
like an acquired skill than a mechanical process. Through practice we develop sensitivities to what is 
morally relevant in a situation, we learn how to structure our situations to see moral problems and 
possibilities, and we develop the skill of "hitting" consistently on the mean between the extremes. All 
of these are skills that are cultivated in much the same way as a basketball player develops through 
practice the skill of shooting the ball through the hoop. 

Bouleusis. This word translates as "deliberation." For Aristotle, moral skill is not the product of 
extensive deliberation (careful, exhaustive thinking about reasons, actions, principles, concepts, etc.) 
but of practice. Those who have developed the skill to find the mean can do so with very little thought 
and effort. Virtuous individuals, for Aristotle, are surprisingly unreflective. They act virtuously 
without thought because it has become second nature to them. 

Akrasia. Ross translates this word as "incontinence" which is outmoded. A better translation is 
weakness of will. For Aristotle, knowing where virtue lies is not the same as doing what virtue demands. 
There are those who are unable to translate knowledge into resolution and then into action. Because 
akrasis (weakness of will) is very real for Aristotle, he also places emphasis in his theory of moral 
development on the cultivation of proper emotions to help motivate virtuous action. Later ethicists 
seek to oppose emotion and right action; Aristotle sees properly trained and cultivated emotions as 
strong motives to doing what virtue requires. 

Logos Aristotle's full definition of virtue is "a state of character concerned with choice, lying in a 
mean, i.e. the mean relative to us, this being determined by a rational principle, and by that principle 
by which [a person] of practical wisdom would determine it." (Ross's translation in Nichomachean 
Ethics, 1106b, 36.) We have talked about character, the mean, and the person of practical wisdom. 
The last key term is "logos" which in this definition is translated by reason. This is a good translation 
if we take reason in its fullest sense so that it is not just the capacity to construct valid arguments 
but also includes the practical wisdom to assess the truth of the premises used in constructing these 
arguments. In this way, Aristotle expands reason beyond logic to include a fuller set of intellectual, 
practical, emotional, and perceptual skills that together form a practical kind of wisdom. 



1.2.4 Virtue 2 

• The following summary of Virtue 2 is taken largely from Rosalind Hursthouse. While she extensively 
qualifies each of these theses in her own version of virtue ethics, these points comprise an excellent 
summary of Virtue 2 which starts with G.E.M. Anscombe's article, "Modern Moral Philosophy," and 
continues on into the present. Hursthouse presents this characterization of Virtue 2 in her book, On 
Virtue Ethics (2001) U.K.: Oxford University Press: 17. 

• Virtue 2 is agent centered. Contrary to deontology and utilitarianism which focus on whether 
actions are good or right, V2 is agent centered in that it sees the action as an expression of the goodness 
or badness of the agent. Utilitarianism focuses on actions which bring about the greatest happiness 
for the greatest number; deontology seeks those actions that respect the autonomy of individuals and 
carry out moral obligations, especially duties. These theories emphasize doing what is good or right. 
Virtue 2, on the other hand, focuses on the agent's becoming or being good. 

• Can Virtue 2 tell us how to act? Because V2 is agent-centered, critics claim that it cannot provide 
insight into how to act in a given situation. All it can say is, "Act the way a moral exemplar would 
act." But what moral standards do moral exemplars use or embody in their actions? And what moral 



CHAPTER 1. ETHICAL LEADERSHIP 

standards do we use to pick out the moral exemplars themselves? Hursthouse acknowledges that this 
criticism hits home. However, she points out that the moral standards come from the moral concepts 
that we apply to moral exemplars; they are individuals who act courageously, exercise justice, 
and realize honesty. The moral concepts "courage," "justice," and "honesty" all have independent 
content that helps guide us. She also calls this criticism unfair: while virtue 2 may not provide 
any more guidance than deontology or utilitarianism, it doesn't provide any less. Virtue 2 may not 
provide perfect guidance, but what it does provide is favorably comparable to what utilitarianism and 
deontology provide. 

Virtue 2 replaces Deontic concepts (right, duty, obligation) with Aretaic concepts (good, 
virtue). This greatly changes the scope of ethics. Deontic concepts serve to establish our minimum 
obligations. On the other hand, aretaic concepts bring the pursuit of excellence within the purview of 
ethics. Virtue ethics produces a change in our moral language that makes the pursuit of excellence an 
essential part of moral inquiry. 

Finally, there is a somewhat different account of virtue 2 (call it virtue 2a) that can be attributed to 
Alisdair Maclntyre. This version "historicizes" the virtues, that is, looks at how our concepts of key 
virtues have changed over time. (Maclntyre argues that the concept of justice, for example, varies 
greatly depending on whether one views justice in Homeric Greece, Aristotle's Greece, or Medieval 
Europe.) Because he argues that skills and actions are considered virtuous only in relation to a 
particular historical and community context, he redefines virtues as those skill sets necessary to realize 
the goods or values around which social practices are built and maintained. This notion fits in well 
with professional ethics because virtues can be derived from the habits, attitudes, and skills needed to 
maintain the cardinal ideals of the profession. 



1.2.5 Virtue 3 

Virtue 3 can best be outlined by showing how the basic concepts of Virtue 1 can be reformu- 
lated to reflect current research in moral psychology. 

1. Reformulating Happiness (Eudaimonia). Mihaly Csikcszentmihalyi has described flow experi- 
ences (see text box below) in which autotelic activities play a central role. For Aristotle, the virtues 
also are autotelic. They represent faculties whose exercise is key to realizing our fullest potentialities as 
human beings. Thus, virtues are self-validating activities carried out for themselves as well as for the 
ends they bring about. Flow experiences are also important in helping us to conceptualize the virtues 
in a professional context because they represent a well practiced integration of skill, knowledge, and 
moral sensitivity. 

2. Reformulating Values (Into Arete or Excellence). To carry out the full project set forth by virtue 
3, it is necessary to reinterpret as excellence key moral values such as honesty, justice, responsibility, 
reasonableness, and integrity. For example, moral responsibility has often been described as carrying 
out basic, minimal moral obligations. As an excellence, responsibility becomes refocused on extending 
knowledge and power to expand our range of effective, moral action. Responsibility reformulated as 
an excellence also implies a high level of care that goes well beyond what is minimally required. 

3. De-emphasizing Character. The notion of character drops out to be replaced by more or less 
enduring and integrated skills sets such as moral imagination, moral creativity, reasonableness, and 
perseverance. Character emerges from the activities of integrating personality traits, acquired skills, 
and deepening knowledge around situational demands. The unity character represents is always com- 
plex and changing. 

4. Practical Skill Replaces Deliberation. Moral exemplars develop skills which, through practice, 
become second nature. These skills obviate the need for extensive moral deliberation. Moral exemplars 
resemble more skillful athletes who quickly develop responses to dynamic situations than Hamlets 
stepping back from action for prolonged and agonizing deliberation. 



5. Greater Role for Emotions. Nancy Sherman discusses how, for Aristotle, emotion is not treated 
as an irrational force but as an effective tool for moral action once it has been shaped and cultivated 
through proper moral education. To step beyond the controvery of what Aristotle did and did not say 
about the emotions (and where he said it) we place this enhanced role for emotions within virtue 3. 
Emotions carry out four essential functions: (a) they serve as modes of attention; (b) they also serve 
as modes of responding to or signaling value; (c) they fulfill a revelatory function; and (d) they provide 
strong motives to moral action. Nancy Sherman, Making a Necessity of Virtue: Aristotle and 
Kant on Virtue (1997), U.K.: Cambridge University Press: 39-50. 

1.2.6 Flow Experiences 

• The psychologist, Mihaly Csikszentmihalyi, has carried out fascinating research on what he terms "flow 
experiences." Mike Martin in Meaningful Work (2000) U.K.: Oxford,: 24, summarizes these in the 
following bullets: 
"clear goals as one proceeds" 
"immediate feedback about progress" 

"a balance between challenges and our skills to respond to them" 
"immersion of awareness in the activity without disruptive distractions" 
"lack of worry about failure" 
loss of anxious self-consciousness" 

time distortions (either time flying or timeslowing pleasurably) " 
the activity becomes autotelic: an end in itself, enjoyed as such" 



1.2.7 Virtue Tables 

The table just below provides a format for spelling out individual virtues through (1) a general description, 
(2) the correlative vices of excess and defect, (3) the skills and mental states that accompany and support 
it, and (4) real and fictional individuals who embody it. Following the table are hints on how to identify and 
characterize virtues. We start with the virtue of integrity: 



10 



CHAPTER 1. ETHICAL LEADERSHIP 



Virtue 


Description 


Excess 


Defect 


Obstacles 

to realizing 

the virtue in 

professional 

practices 


Moral Exem- 
plar 


Integrity 


A meta-virtue 
in which the 
holder ex- 
hibits unity 
of character 
manifested 
in holding 
together even 
in the face of 
strong disrup- 
tive pressures 
or temptations 


Excess: 
Rigidity- 
sticking to 
one's guns 
even when one 
is obviously 
wrong(2,3) 


Defect: Wan- 
tonness. A 
condition 
where one 
exhibits no 
stability or 
consistency in 
character 


Individual 
corruption: In- 
dividuals can 
be tempted by 
greed toward 
the vice of 
defect. Lack of 
moral courage 
can also move 
one to both 
extremes 


Saint Thomas 
More as por- 
trayed in 
Robert Bolt 's 
A Man for All 
Seasons. More 
refuses to take 
an oath that 
goes against 
the core be- 
liefs in terms 
of which he 
defines himself. 










Institutional 
Corruption: 
One may work 
in an organi- 
zation where 
corruption 
is the norm. 
This generates 
dilemmas like 
following an 
illegal order or 
getting fired. 




continued on next page 



11 



Table 1.2 



1.2.8 Exercise 1: Construct Virtue Tables for Professional Virtues 

1. Discuss in your group why the virtue you have been assigned is important for the practice of your 
profession. What goods or values does the consistent employment of this virtue produce? 

2. Use the discussion in #1 to develop a general description of your virtue. Think along the following 
lines: people who have virtue X tend to exhibit certain characteristics (or do certain things) in certain 
kinds of situations. Try to think of these situations in terms of what is common and important to your 
profession or practice. 

3. Identify the corresponding vices. What characterizes the points of excess and defect between which 
your virtue as the mean lies? 

4. What obstacles arise that prevent professionals from practicing your virtue? Do well-meaning profes- 
sionals lack power or technical skill? Can virtues interfere with the realization of non-moral values like 
financial values? See if you can think of a supporting scenario or case here. 

5. Identify a moral exemplar for your virtue. Make use of the exemplars described in the Moral Exem- 
plars in Business and Professional Ethics module. 

6. Go back to task #2. Redefine your description of your virtue in light of the subsequent tasks, especially 
the moral exemplar you identified. Check for coherence. 

7. Finally, does your virtue stand alone or does it need support from other virtues or skills? For example, 
integrity might also require moral courage. 

1.2.9 Exercise 2: Reflect on these Concluding Issues 

• Did you have trouble identifying a moral exemplar? Many turn to popular figures for their moral 
exemplars. Movies and fiction also offer powerful models. Why do you think that it is hard to find 
moral exemplars in your profession? Is it because your profession is a den of corruption? (Probably 
not.) Do we focus more on villains than on heroes? Why or why not? 

• What did you think about the moral leaders portrayed in the Moral Exemplars in Business and 
Professional Ethics module? 

• Did you have trouble identifying both vices, i.e., vices of excess and defect? If so, do you think this 
because some virtues may not have vices of excess and defect? What do you think about Aristotle's 
doctrine of the mean? 

• Did you notice that the virtue profiles given by your group and the other groups in the class overlapped? 
Is this a problem for virtue theory? Why do our conceptions of the key moral values and virtues overlap? 

• Did you find the virtues difficult to apply? What do you think about the utilitarian and deontological 
criticism of virtue ethics, namely, that it cannot provide us with guidelines on how to act in difficult 
situations? Should ethical theories emphasize the act or the person? Or both? 

• The most tenacious obstacle to working with virtue ethics is to change focus from the morally minimal 
to the morally exemplary. "Virtue" is the translation of the Greek word, arete. But "excellence" is, 
perhaps, a better word. Understanding virtue ethics requires seeing that virtue is concerned with the 
exemplary, not the barely passable. (Again, looking at moral exemplars helps.) Arete transforms 
our understanding of common moral values like justice and responsibility by moving from minimally 
acceptable to exemplary models. 

Moral Leaders 3 The profiles of several moral leaders in practical and professional ethics. Computer Ethics 
Cases 4 This link provides several computer ethics cases and also has a description of decision making and 

3 http:// www.onlineethics.org 
4 http:// www.computingcases.org 



12 CHAPTER 1. ETHICAL LEADERSHIP 

socio-technical systems frameworks. Moral Exemplars in Business and Professional Ethics (Section 1.3) 
Profiles of several moral leaders in practical and professional ethics. 

1.2.10 Presentation on Virtue Ethics 

[Media Object] 5 

1.2.11 Resources 

• Murdoch, I. (1970). The Sovereignty of Good. UK: London, Routledge. 

• Sherman, N. (1989). The Fabric of Character: Aristotle's Theory of Virtue. UK: Oxford, Oxford 
University Press. 

• Hursthouse, R. (1999). On Virtue Ethics. UK: Oxford, Oxford University Press. 

• Virtue Ethics. (2003). Edited by Stephen Darwall. UK: Oxford: Blackwell. 

• Blum, L. (1994). Moral Perception and Particularity. UK: Cambridge University Press. 

• Pincoffs, E.L. (1986). Quandaries and Virtues: Against Reductivism in Ethics. Lawrence, KS: Uni- 
versity of Kansas Press. 

• Virtue Ethics (1997). Edited by Crisp, R. and Slote, M. UK: Oxford, Oxford University Press. 

• Environmental Virtue Ethics. (2005). Edited by Sandler, R. and Cafaro, P. New York: Rowman and 
Littlefield. 

• Frey, W. (2008). "Engineering Ethics in Puerto Rico: Issues and Narratives. Science and Engineering 
Ethics, 14: 417-431. 

• Frey, W. (2010). "Teaching Virtue: Pedagogical Implications of Moral Psychology. Science and Engi- 
neering Ethics, 16: 611-628. 

• Huff, C, Barnard, L. and Frey, W. (2008) "Good computing: a pedagogically focused model of virtue 
in the practice of computing (parts 1 and 2)." Information, Communication and Ethics in Society, 6(3), 
246-278. 

• Huff, C, Barnard, L. and Frey, W. (2008) "Good computing: a pedagogically focused model of virtue 
in the practice of computing (parts 1 and 2). Information, Communication and Ethics in Society, 6(4), 
284-316., 



1.3 Moral Exemplars in Business and Professional Ethics 6 

1,3,1 Module Introduction 

Through the activities of this module you will learn to balance cautionary tales in business and professional 
ethics with new stories about those who consistently act in a morally exemplary way. While cautionary 
tales teach us what to avoid, narratives from the lives of moral exemplars show us how to be good. A study 
of moral best practices in business and professional ethics shows that moral exemplars exhibit positive and 
learnable skills. This module, then, looks at moral exemplars in business and the professions, outlines their 
outstanding accomplishments, and helps you to unpack the strategies they use to overcome obstacles to 
doing good. 

You will begin by identifying outstanding individuals in business and associated practices who have 
developed moral "best practices." Your task is look at these individuals, retell their stories, identify the skills 
that help them do good, and build a foundation for a more comprehensive study of virtue in occupational 
and professional ethics. 



5 This media object is a downloadable file. Please view or download it at 
<An Introduction to Virtue Ethics. pptx> 

6 This content is available online at <http://cnx.Org/content/ml4256/l.10/>. 



13 

1.3.2 Exercise 1: Choose a moral exemplar 

• Identify a moral exemplar and provide a narrative description of his or her life story. 

• To get this process started, look at the list of moral exemplars provided in this module. The links in 
the upper left hand corner of this module will help you to explore their accomplishments in detail. Feel 
free to choose your own exemplar. Make sure you identify someone in the occupational and professional 
areas such as business and engineering. These areas have more than their share of exemplars, but they 
tend to escape publicity because their actions avoid publicity generating disasters rather than bring 
them about. 

1.3.3 Moral Exemplars 

• 1. William LeMesseur. LeMesseur designed the Citicorp Building in New York. When a student 
identified a critical design flaw in the building during a routine class exercise, LeMesseur responded, not 
by shooting the messenger, but by developing an intricate and effective plan for correcting the problem 
before it issued in drastic real world consequences. Check out LeMesseur's profile at onlineethics and 
see how he turned a potential disaster into a good deed. 

• 2. Fred Cuny, starting in 1969 with Biafra, carried out a series of increasingly effective interventions 
in international disasters. He brought effective methods to disaster relief such as engineering know- 
how, political savvy, good business sense, and aggressive advocacy. His timely interventions saved 
thousands of Kurdish refugees in the aftermath of the Persian Gulf War in 1991. He also helped design 
and implement an innovative water filtration system in Sarajevo during the Bosnia-Serb conflict in 
1993. For more details, consult the biographical sketch at onlineethics. 

• 3. Roger Boisjoly worked on a team responsible for developing o-ring seals for fuel tanks used in the 
Challenger Shuttle. When his team noticed evidence of gas leaks he made an emergency presentation 
before officials of Morton Thiokol and NASA recommending postponing the launch scheduled for the 
next day. When decision makers refused to change the launch date, Boisjoly watched in horror the next 
day as the Challenger exploded seconds into its flight. Find out about the courageous stand Boisjoly 
took in the aftermath of the Challenger explosion by reading the biographical sketch at onlineethics. 

• 4. Muhammad Yunus won the Nobel Prize for Peace in 2006. His effort in setting up "micro-businesses" 
funded through "micro-lending" has completely changed the paradigm on how to extend business 
practices to individuals at the bottom of the pyramid. Learn about his strategies for creating micro- 
businesses and how those strategies have been extended throughout the world, including Latin America, 
by listening to an interview with him broadcast by the Online News Hour. (See link included in this 
module.) 

• 5. Bill Gates has often been portrayed as a villain, especially during the anti-trust suit against Mircosoft 
in the mid 1990's. Certainly his aggressive and often ruthless business practices need to be evaluated 
openly and critically. But recently Gates stopped participating in the day-to-day management of 
his company, Microsoft, and has set up a charitable foundation to oversee international good works 
projects. Click on the link included in this module to listen to and read an interview recently conducted 
with him and his wife, Melinda, on their charitable efforts. 

• 6. Jeffrey Skilling, former CEO of Enron, can hardly be called a moral exemplar. Yet when Enron was 
at its peak, its CEO, Jeffrey Skilling, was considered among the most innovative, creative, and brilliant 
of contemporary corporate CEOs. View the documentary, The Smartest Guys in the Room, read the 
book of the same title, and learn about the configuration of character traits that led to Skilling's initial 
successes and ultimate failure. A link included in this module will lead you to an interview with Skilling 
conducted on March 28, 2001. 

• Inez Austin worked to prevent contamination from nuclear wastes produced by a plutonium production 
facility. Visit Online Ethics by clicking on the link above to find out more about her heroic stand. 

• Rachael Carson's book, The Silent Spring, was one of the key events inaugurating the environmental 
movement in the United States. For more on the content of her life and her own personal act of courage, 
visit the biographical profile at Online Ethics. You can click on the Supplimental Link provided above. 



14 CHAPTER 1. ETHICAL LEADERSHIP 

1.3.4 Exercise Two: Moral Exemplar Profiles 

• What are the positive and negative influences you can identify for your moral exemplar? 

• What good deeds did your exemplar carry out? 

• What obstacles did your moral exemplar face and how did he or she overcome them? 

• What skills, attitudes, beliefs, and emotions helped to orient and motivate your moral exemplar.? 



1.3.5 Exercise Three 

Prepare a short dramatization of a key moment in the life of your group's moral exemplar. 

1.3.6 Textbox: Two different Types of Moral Exemplar 

• Studies carried out by Chuck Huff into moral exemplars in computing suggest that moral exemplars 
can operate as craftspersons or reformers. (Sometimes they can combine both these modes.) 

• Craftspersons (1) draw on pre-existing values in computing, (2) focus on users or customers who have 
needs, (3) take on the role of providers of a service/product, (4) view barriers as inert obstacles or 
puzzles to be solved, and (5) believe they are effective in their role. 

• Reformers (1) attempt to change organizations and their values, (2) take on the role of moral crusaders, 
(3) view barriers as active opposition, and (4) believe in the necessity of systemic reform 

• These descriptions of moral exemplars have been taken from a presentation by Huff at the STS col- 
loquium at the University of Virginia on October 2006. Huff's presentation can be found at the link 
provided in the upper left hand corner of this module. 



1.3.7 What Makes a Moral Exemplar? PRIMES Explained 

General Comments on Exemplars 

• Moral exemplars have succeeded in integrating moral and professional attitudes and beliefs into their 
core identity. Going against these considerations for moral exemplars is tantamount to acting against 
self. Acting in accordance with them becomes second nature. 

• Moral exemplars often achieve their aims with the support of "support groups." In fact, moral exemplars 
are often particularly adept at drawing support from surrounding individuals, groups and communities. 
This goes against the notion that exemplars are isolated individuals who push against the current. (Not 
all exemplars need fit as heroes into Ayn Rand novels.) 

• Moral exemplars often do not go through periods of intensive and prolonged deliberation in order to hit 
upon the correct action. If we want a literary example, we need to replace the tortured deliberations 
of a Hamlet with the quick and intuitive insight of an Esther Summerson. (Summerson is a character 
in Charles Dickens' novel, Bleak House. See both William Shakespeare and Charles Dickens for more 
examples of villains and exemplars.) Some have situated moral exemplars within virtue ethics. They 
have cultivated moral habits that allow them to do good as second nature. They have also found ways 
to integrate moral reasoning with emotion (as motive), perception (which helps them zero in on moral 
relevance), and skill (which helps implement moral value). In this sense, moral expertise functions 
much as athletic or technical expertise; all are difficult to acquire but once acquired lead to highly 
skilled actions performed almost effortlessly. 

PRIMES 

Primes stands for Personality, Integrating value into self-system, Moral Ecology, and Moral Skills Sets. 
These are the elements composing moral expertise that have been identified by Huff and Rogerson based on 
interviews they conducted with exemplars in the areas of computing. 

Personality 



15 

• Moral exemplars exhibit different configurations of personality traits based on the big five. Locate the 
moral exemplar you have chosen in terms of the following five continuums (or continua): 

• Neuroticism to Lack of Neuroticism (Stability?) 

• Agreeableness to Disagreeableness 

• Extraversion to Introversion 

• Openness to Closedness 

• Conscientiousness to Lack of Conscientiousness 

• Examine your exemplar on each of these scales. In and of themselves, these qualities are neither good 
nor bad. They can be integrated to form bad characters or good characters. In many cases, moral 
exemplars stand out through how they have put their personality characteristics to "good use." (They 
have used them as vehicles or channels to excellence.) 

Integrating Moral Value into Self-System 

• As said above, moral exemplars stand out by the way in which (and the extent to which) they have 
integrated moral value into their self-system. Because of this, they are strongly motivated to do good 
and avoid doing bad. Both (doing good and refraining from doing bad) express who they are. If they 
slip into bad deeds, this motivational system pushes them to improve to avoid repeating bad deeds. 

• One way of integrating moral value into self-system is by looking at stories and narratives of those 
who have displayed moral excellence. Many of the individuals portrayed above (Carson, Boisjoly, 
LeMesseur, Cuny, Austin, and Yunus) provide concrete models of outstanding moral careers. 

• Literature also provides its models of moral exemplars. Charles Dickens paints especially powerful 
portraits of both moral heroes (Esther Summerson and "Little Dorritt") and villains (Heep and Skim- 
pole). 

• Other vehicles for integrating moral value centrally into the self-system lie in affiliations, relationships, 
and friendships. Aristotle shows the importance of good friendships in developing virtues. Moral 
exemplars most often can point to others who have served as mentors or strong positive influences. 
For example, Roger Boisjoly tells of how he once went to a senior colleague for advice on whether to 
sign off on a design that was less than optimal. His colleague's advice: would you be comfortable with 
your wife or child using a product based on this design? 

• The ethicist, Bernard Williams, has argued forcefully for the importance of personal projects in estab- 
lishing and maintaining integrity. Personal projects, roles, and life tasks all convey value; when these 
hold positive moral value and become central unifying factors in one's character, then they also serve 
to integrate moral value into the self system. 

• Augusto Blasi, a well known moral psychologist, gives a particularly powerful account (backed by 
research) of the integration of moral value into self-system and its motivational effect. 

Moral Ecology 

• Moral Ecologies: "The term moral ecology encourages us to consider the complex web of relationships 
and influences, the long persistence of some factors and the rapid evolution of others, the variations 
in strength and composition over time, the micro-ecologies that can exist within larger ones, and the 
multidirectional nature of causality in an ecology." From Huff et. al. 

• Moral ecologies refer to social surrounds, that is, the different groups, organizations, and societies that 
surround us and to which we are continually responding. 

• We interact with these social surrounds as organisms interact with their surrounding ecosystems. In 
fact, moral ecologies offer us roles (like ecological niches) and envelop us in complex organizational 
systems (the way ecosystems are composed of interacting and interrelated parts). We inhabit and act 
within several moral ecologies; these moral ecologies, themselves, interact. Finally, moral ecologies, 
like natural ecosystems, seek internal and external harmony and balance. Internally, it is important 
to coordinate different the constituent individuals and the roles they play. Externally, it is difficult 
but equally important to coordinate and balance the conflicting aims and activities of different moral 
ecologies. 



16 CHAPTER 1. ETHICAL LEADERSHIP 

• Moral ecologies shape who we are and what we do. This is not to say that they determine us. But 
they do channel and constrain us. For example, your parents have not determined who you are. But 
much of what you do responds to how you have experienced them; you agree with them, refuse to 
question their authority, disagree with them, and rebel against them. The range of possible responses 
is considerable but these are all shaped by what you experienced from your parents in the past. 

• The moral ecologies module (see the link provided above) describes three different moral ecologies that 
are important in business: quality-, customer-, and finance-driven companies. (More "kinds" could 
be generated by combining these in different ways: for example, one could characterize a company 
as customer-driven but transforming into a quality-driven company.) Roles, strategies for dissent, 
assessment of blame and praise, and other modes of conduct are shaped and constrained by the overall 
character of the moral ecology. 

• Moral ecologies, like selves, can also be characterized in terms of the "centrality" of moral value. Some 
support the expression of moral value or certain kinds of moral value (like loyalty) while undermining 
or suppressing the expression of others (like courage or autonomy). 

• Finally, think in terms of how personality traits integrated around moral value interact with different 
types of moral ecology. If a moral ecology undermines virtuous conduct, what strategies are available 
for changing it? Or resisting it? If there are different kinds of moral exemplar, which pair best with 
which moral ecology? (How would a helper or craftsperson prevail in a finance-driven moral ecology 
like those characterized by Robert Jackall in Moral Mazes? 

Moral Skills Sets 

• Moral expertise is not reducible to knowing what constitutes good conduct and doing your best to 
bring it about. Realizing good conduct, being an effective moral agent, bringing value into the work, 
all require skills in addition to a "good will." PRIMES studies have uncovered four skill sets that play 
a decisive role in the exercise of moral expertise. 

• Moral Imagination: The ability to project into the standpoint of others and view the situation 
at hand through their lenses. Moral imagination achieves a balance between becoming lost in the 
perspectives of others and failing to leave one's own perspective. Adam Smith terms this balance 
"proportionality" which we can achieve in empathy when we feel with them but do not become lost 
in their feelings. Empathy consists of feeling with others but limiting the intensity of that feeling to 
what is proper and proportionate for moral judgment. 

• Moral Creativity: Moral Creativity is close to moral imagination and, in fact, overlaps with it. 
But it centers in the ability to frame a situation in different ways. Patricia Werhane draws attention 
to a lack of moral creativity in the Ford Pinto case. Key Ford directors framed the problem with 
the gas tank from an economical perspective. Had they considered other framings they might have 
appreciated the callousness of refusing to recall Pintos because the costs of doing so (and retrofitting 
the gas tanks) were greater than the benefits (saving lives). They did not see the tragic implications 
of their comparison because they only looked at the economic aspects. Multiple framings open up new 
perspectives that make possible the design of non-obvious solutions. 

• Reasonableness: Reasonableness balances openness to the views of others (one listens and impartially 
weighs their arguments and evidence) with commitment to moral values and other important goals. 
One is open but not to the extent of believing anything and failing to keep fundamental commitments. 
The Ethics of Team Work module (see link above) discusses strategies for reaching consensus that are 
employed by those with the skill set of reasonableness. These help avoid the pitfalls of group-based 
deliberation and action. 

• Perseverance: Finally, perseverance is the "ability to plan moral action and continue on that course 
by responding to circumstances and obstacles while keeping ethical goals intact." Huff et. al. 



17 

1.3.8 Presentation on Moral Exemplars 

[Media Object] 7 

1.3.9 Bibliography 

• Blasi, A. (2004). Moral Functioning: Moral Understanding and Personality. In D.K Lapsley and D. 
Narvaez (Eds.) Moral Development, Self, and Identity, (pp. 335-347). Mahwah, N. J.: Lawrence 
Erlbaum Associates, Inc. 

• Colby, A., Damon, W. (1992). Some do care: Contemporary lives of moral commitment. New York: 
Free Press. 

• Flanagan, O. (1991). Varieties of moral personality: Ethics and psychological realism. Cambridge, 
MA: Harvard University Press. 

• Huff, C, Rogerson, S. (2005). Craft and reform in moral exemplars in computing. Paper presented at 
ETHICOMP2005 in Linkoping, September. 

• Huff, C, Frey, W. (2005). Moral Pedagogy and Practical Ethics. Science and Engineering Ethics, 
11(3), 389-408. 

• Huff, C, Barnard, L., Frey, W. (2008). Good computing: a pedagogically focused model of virtue 
in the practice of computing (part 1), Journal of Information, Communication and Ethics in Society, 
6(3), 246-278. 

• Huff, C, Barnard, L., Frey, W. (2008). Good computing: a pedagogically focused model of virtue 
in the practice of computing (part 2), Journal of Information, Communication and Ethics in Society, 
6(4), 286- 316. 

• Jackall, R. (1988). Moral Mazes: The World of Corporate Managers. Oxford: Oxford University Press. 

• Johnson, M. (1993). Moral Imagination: Implications of Cognitive Science for Ethics. Chicago: 
Chicago University Press, 199-202. 

• Lawrence, A. and Weber, J. (2010). Business and Society: Stakeholders Ethics and Public Policy, 13th 
Edition. New York: McGraw-Hill. 

• Pritchard, M. (1998). "Professional Responsibility: Focusing on the Exemplary," in Science and Engi- 
neering Ethics, 4: 215-234. 

• Werhane, P. (1999). Moral Imagination and Management Decision Making. Oxford: Oxford University 
Press, 93-96. 

Insert paragraph text here. 

1.4 Ethics of Team Work 8 

• Ethics of Team Work 

• William J. Frey (working with material developed by Chuck Huff at St. Olaf College 

• Centro de la Etica en las Profesiones 

• University of Puerto Rico - Mayaguez 



1.4.1 Module Introduction 

Much of your future work will be organized around group or team activities. This module is designed to 
prepare you for this by getting you to reflect on ethical and practical problems that arise in small groups like 
work teams. Four issues, based on well-known ethical values, are especially important. How do groups achieve 
justice (in the distribution of work) , responsibility (in specifying tasks, assigning blame, and awarding credit) , 



7 This media object is a downloadable file. Please view or download it at 
<Brief Comments on Moral Exemplars.pptx> 

8 This content is available online at <http://cnx.Org/content/ml3760/l.10/>. 



18 CHAPTER 1. ETHICAL LEADERSHIP 

reasonableness (ensuring participation, resolving conflict, and reaching consensus), and honesty (avoiding 
deception, corruption, and impropriety)? This module asks that you develop plans for realizing these moral 
values in your group work this semester. Furthermore, you are provided with a list of some of the more 
common pitfalls of group work and then asked to devise strategies for avoiding them. Finally, at the end of 
the semester, you will review your goals and strategies, reflect on your successes and problems, and carry 
out an overall assessment of the experience. 

1,4,2 Module Activities 

1. Groups are provided with key ethical values that they describe and seek to realize thorugh group 
activity. 

2. Groups also study various obstacles that arise in collective activity: the Abilene Paradox, Groupthink, 
and Group Polarization. 

3. Groups prepare initial reports consisting of plans for realizing key values in their collective activity. 
They also develop strategies for avoiding associated obstacles. 

4. At the end of the semester, groups prepare a self-evaluation that assesses success in realizing ethical 
values and avoiding obstacles. 

5. Textboxes in this module describe pitfalls in groups activities and offer general strategies for preventing 
or mitigating them. There is also a textbox that provides an introductory orientation on key ethical 
values or virtues. 



1,4,3 Value Profiles for Professional Ethics 

1. Definition - A value "refers to a claim about what is worthwhile, what is good. A value is a single word 
or phrase that identifies something as being desirable for human beings." Brincat and Wike, Morality 
and the Professional Life: Values at Work 

2. Reasonableness - Defusing disagreement and resolving conflicts through integration. Characteristics 
include seeking relevant information, listening and responding thoughtfully to others, being open to 
new ideas, giving reasons for views held, and acknowledging mistakes and misunderstandings. (From 
Michael Pritchard, Reasonable Children) 

3. Responsibility - The ability to develop moral responses appropriate to the moral issues and problems 
that arise in one's day-to-day experience. Characteristics include avoiding blame shifting, designing 
overlapping role reponsibilities to fill responsibility "gaps", expanding the scope and depth of general 
and situation-specific knowledge, and working to expand control and power. 

4. Respect - Recognizing and working not to circumvent the capacity of autonomy in each individual. 
Characteristics include honoring rights such as privacy, property, free speech, due process, and par- 
ticipatory rights such as informed consent. Disrespect circumvents autonomy by deception, force, or 
manipulation. 

5. Justice - Giving each his or her due. Justice breaks down into kinds such as distributive (dividing 
benefits and burdens fairly), retributive (fair and impartial administration of punishments), adminis- 
trative (fair and impartial administration of rules), and compensatory (how to fairly recompense those 
who have been wrongfully harmed by others). 

6. Trust - According to Solomon, trust is the expectation of moral behavior from others. 

7. Honesty - Truthfulness as a mean between too much honesty (bluntness which harms) and dishonesty 
(deceptiveness, misleading acts, and mendaciousness). 

8. Integrity - A meta-value that refers to the relation between particular values. These values are inte- 
grated with one another to form a coherent, cohesive and smoothly functioning whole. This resembles 
Solomon's account of the virtue of integrity. 



19 

1.4.4 Exercise 1: Developing Strategies for Value Realization 

• Design a plan for realizing key moral values of team work. Your plan should address the following 
value-based tasks 

• How does your group plan on realizing justice? For example, how will you assign tasks within the 
group that represent a fair distribution of the work load and, at the same time, recognize differences 
in individual strengths and weaknesses? How does your group plan on dealing with members who fail 
to do their fair share? 

• How does your group plan on realizing responsibility? For example, what are the responsibilities that 
members will take on in the context of collective work? Who will be the leader? Who will play devil's 
advocate to avoid groupthink? Who will be the spokesperson for the group? How does your group 
plan to make clear to each individual his or her task or role responsibilities? 

• How does your group plan on implementing the value of reasonableness? How will you guarantee 
that each individual participates fully in group decisions and activities? How will you deal with the 
differences, non-agreements, and disagreements that arise within the group? What process will your 
group use to reach agreement? How will your group insure that every individual has input, that each 
opinion will be heard and considered, and that each individual will be respected? 

• How does your group plan on implementing the value of (academic) honesty? For example, how will 
you avoid cheating or plagiarism? How will you detect plagiarism from group members, and how will 
you respond to it? 

• Note: Use your imagination here and be specific on how you plan to realize each value. Think preven- 
tively (how you plan on avoiding injustice, irresponsibility, injustice, and dishonesty) and proactively 
(how you can enhance these values). Don't be afraid to outline specific commitments. Expect some of 
your commitments to need reformulation. At the end of the semester, this will help you write the final 
report. Describe what worked, what did not work, and what you did to fix the latter. 

1.4.5 Obstacles to Group Work (Developed by Chuck Huff for Good Computing: 
A Virtue Approach to Computer Ethics) 

1. The Abilene Paradox. The story involves a family who would all rather have been at home that ends 
up having a bad dinner in a lousy restaurant in Abilene, Texas. Each believes the others want to go to 
Abilene and never questions this by giving their own view that doing so is a bad idea. In the Abilene 
paradox, the group winds up doing something that no individual wants to do because of a breakdown 
of intra-group communication. 

2. Groupthink. The tendency for very cohesive groups with strong leaders to disregard and defend 
against information that goes against their plans and beliefs. The group collectively and the members 
individually remain loyal to the party line while happily marching off the cliff, all the while blaming 
"them" (i.e., outsiders) for the height and situation of the cliff. 

3. Group Polarization. Here, individuals within the group choose to frame their differences as disagree- 
ments. Framing a difference as non-agreement leaves open the possibility of working toward agreement 
by integrating the differences or by developing a more comprehensive standpoint that dialectally synthe- 
sizes the differences. Framing a difference as disagreement makes it a zero sum game; one's particular 
side is good, all the others bad, and the only resolution is for the good (one's own position) to win out 
over the bad (everything else) . 

4. Note: All of these are instances of a social psychological phenomenon called conformity. But there 
are other processes at work too, like group identification, self-serving biases, self-esteem enhancement, 
self-fulfilling prophecies, etc. 

Best Practices for Avoiding Abilene Paradox 

• At the end of the solution generating process, carry out an anonymous survey asking participants if 
anything was left out they were reluctant to put before group. 



20 CHAPTER 1. ETHICAL LEADERSHIP 

• Designate a Devil's Advocate charged with criticizing the group's decision. 

• Ask participants to reaffirm group decision-perhaps anonymously. 

Best Practices for Avoiding Groupthink (Taken from Janis, 262-271) 

• "The leader of a policy-forming group should assign the role of critical evaluator to each member, 
encouraging the group to give high priority to airing objections and doubts." 

• "The leaders in an organization's hierarchy, when assigning a policy-planning mission to a group, should 
be impartial instead of stating preferences and expectations at the outset." 

• "Throughout the period when the feasibility and effectiveness of policy alternatives are being sur- 
veyed, the policy-making group should from time to time divide into two or more subgroups to meet 
separately...." 

• One or more outside experts or qualified colleagues within the organization who are not core members 
of the policy-making group should be invited to each meeting ...and should be encouraged to challenge 
the views of the core members." 

• "At every meeting devoted to evaluating policy alternatives, at least one member should be assigned 
the role of devil's advocate." 

Best Practices for Avoiding Polarizatoin (Items taken from "Good Computing: A Virtue 
Approach to Computer Ethics" by Chuck Huff, William Frey and Jose Cruz (Unpublished 
Manuscript) 

• Set Quotas. When brainstorming, set a quota and postpone criticism until after quota has been met. 

• Negotiate Interests, not Positions. Since it is usually easier to integrate basic interests than 
specific positions, try to frame the problem in terms of interests. 

• Expanding the Pie. Conficts that arise from situational constraints can be resolved by pushing back 
those constraints through negotiation or innovation.. 

• Nonspecific Compensation. One side makes a concession to the other but is compensated for that 
concession by some other coin. 

• Logrolling. Each party lowers their aspirations on items that are of less interest to them, thus trading 
off a concession on a less important item for a concession from the other on a more important item. 

• Cost-Cutting. One party makes an agreement to reduce its aspirations on a particular thing, and the 
other party agrees to compensate the party for the specific costs that reduction in aspirations involves. 

• Bridging. Finding a higher order interest on which both parties agree, and then constructing a 
solution that serves that agreed-upon interest. 

1.4.6 Exercise 2 - Avoiding the Pitfalls of Group Work 

• Design a plan for avoiding the pitfalls of group work enumerated in the textbox above. 

• How does your group plan on avoiding the Abilene Paradox? 

• How does your group plan on avoiding Group Polarization? 

• How does your group plan on avoiding Groupthink? 

• Note: Use imagination and creativity here. Think of specific scenarios where these obstacles may arise, 
and what your group can do to prevent them or minimize their impact. 



1.4.7 Exercise 3: Prepare a Final, Group Self-Evaluation 



Due Date: One week after the last class of the semester when your group turns in all its materials. 

Length: A minimum of five pages not including Team Member Evaluation Forms 

Contents: 

1. Restate the Ethical and Practical Goals that your group developed at the beginning of its formation. 



21 

• 2. Provide a careful, documented assessment of your group's success in meeting these goals. (Don't 
just assert that "Our group successfully realized justice in all its activities this semester." How did 
your group characterize justice in the context of its work? What specific activities did the group carry 
out to realize this value? What, among these activities, worked and what did not work?) 

• 3. Identify obstacles, shortcomings or failures that you group experienced during the semester. How 
did these arise? Why did they arise? How did you respond to them? Did your response work? What 
did you learn from this experience? 

• 4. Assess the plans you set forth in your initial report on how you intended to realize values and avoid 
pitfalls. How did these work? Did you stick to your plans or did you find it necessary to change or 
abandon them in the face of challenges? 

• 5. Discuss your group's procedures and practices? How did you divide and allocate work tasks? How 
did you reach consensus on difficult issues? How did you ensure that all members were respected and 
allowed significant and meaningful participation? What worked and what did not work with respect 
to these procedures? Will you repeat them in the future? Would you recommend these procedures as 
best practices to future groups? 

• 6. What did you learn from your experience working as a team this semester? What will require 
further reflection and thought? In other words, conclude your self-evaluation with a statement that 
summarizes your experience working together as a team this semester. 

1.4,8 Wrap Up: Some further points to consider... 

1. Don't gloss over your work with generalizations like, "Our group was successful and achieved all of its 
ethical and practical goals this semester." Provide evidence for success claims. Detail the procedures 
designed by your group to bring about these results. Are they "best practices"? What makes them 
best practices? 

2. Sometimes — especially if difficulties arose — it is difficult to reflect on your group's activities for the 
semester. Make the effort. Schedule a meeting after the end of the semester to finalize this reflection. 
If things worked well, what can you do to repeat these successes in the future? If things didn't work 
out, what can you do to avoid similar problems in the future? Be honest, be descriptive and avoid 
blame language. 

3. This may sound harsh but get used to it. Self-evaluations — group and individual — are an integral part 
of professional life. They are not easy to carry out, but properly done they help to secure success and 
avoid future problems. 

4. Student groups — perhaps yours — often have problems. This self-evaluation exercise is designed to help 
you face them rather than push them aside. Look at your goals. Look at the strategies you set forth for 
avoiding Abilene, groupthink, and group polarization. Can you modify them to deal with problems? 
Do you need to design new procedures? 



1.4.9 Ethics of Team Work Presentations 

Values in Team Work (Thought Experiments) 

[Media Object] 9 

Pitfalls to Avoid in Group Work 

[Media Object] 10 

Thought Experiments on Group Work 

[Media Object] 11 



9 This media object is a downloadable file. Please view or download it at 
<Ethics of Team Work.pptx> 

10 This media object is a downloadable file. Please view or download it at 
<Pitfalls to Avoid in Group Work.pptx> 

"This media object is a downloadable file. Please view or download it at 



22 CHAPTER 1. ETHICAL LEADERSHIP 

1.4.10 Bibliography 

1. Weston, A. (2002). A Practical Companion to Ethics: 2nd Edition. Oxford, UK: Oxford 
University Press 

2. Flores, F. and Solomon, R. (2003). Building Trust: In Business, Politics, Relationships and 
Life. Oxford, UK: Oxford University Press. 

3. Brincat, Cynthia A. and Wike, Victoria S. (2000) Morality and the Professional Life: Values at 
Work. Upper Saddle River, NJ: Prentice Hall. 

4. Urban Walker, M. (2006). Moral Repair: Reconstructing Moral Relations After Wrongdoing. 
Cambridge, UK: Cambridge University Press. 

5. Pritchard, M. (1996). Reasonable Children: Moral Education and Moral Learning. Lawrence, 
KS: Kansas University Press. 

6. Janis, I. Groupthink: Psychological Studies of Policy Decisions and Fiascoes— 2nd Ed.. 
Boston, Mass: Wadsworth. 

7. Sunstein, C.R. (2006). Infotopia: How Many Minds Produce Knowledge. Oxford, UK: Oxford 
University Press, 217-225. 



<Thought Experiments on Group Work.docx> 



Chapter 2 

Ethical Decision-Making 



2.1 Ethical Rights for Working Engineers and Other Professionals 1 

2.1.1 Module Introduction 

Preliminary Draft distributed at APPE, 2005 in San Antonio, TX 

Engineers and other professionals work in large corporations under the supervision of managers who 
may lack their expertise, skills, and commitment to professional standards. This creates communication 
and ethical challenges. At the very least, professionals are put in the position of having to advocate their 
ethical and professional standards to those who, while not being opposed to them, may not share their 
understanding of and commitment to them. 

This module is designed to give you the tools and the practice using them necessary to prevail in situations 
that require advocacy of ethical and professional standards. In this module you carry out several activities. 
(1) You will study the philosophical and ethical foundations of modern rights theory through a brief look at 
Kantian Formalism. (2) You will learn a framework for examining the legitimacy of rights claims. (3) You 
will practice this framework by examining several rights claims that engineers make over their supervisors. 
This examination will require that you reject certain elements, rephrase others, and generally recast the 
claim to satisfy the requirments of the rights justification framework. (4) Finally, in small groups you will 
build tables around your reformulation of these rights claims and present the results to the class. This 
module will help you to put your results together with the rest of your classmates and collectively assemble 
a toolkit consisting of the legitimate rights claims that engineers and other professionals can make over their 
managers and supervisors. 

For more background on rights theory and the relation of rights and duties see (1) Henry Shue, Basic 
Rights: Subsistence, Affluence, and U.S. Foreign Policy, 2nd edition, Princeton, 1980 and (2) 
Thomas Donaldson, The Ethics of International Business, Oxford, 1989. This exercise has been used 
in computer and engineering ethics classes at the University of Puerto Rico at Mayaguez from 2002 on to 
the present. It is being incorporated into the textbook, Good Computing: A Virtue Approach to Computer 
Ethics by Chuck Huff, William Frey, and Jose Cruz. 

2.1.2 What you need to know... 

Problematic Right Claims 

1. El derecho para actuar de acuerdo a la conciencia etica y rechazar trabajos en los cuales exista una 
variacion de opinones morales. 

2. El derecho de expresar juicio profesional, y hacer pronunciamientos publicos que sean consistentes con 
restricciones corporativas sobre la informacion propietaria. 



1 This content is available online at <http://cnx.Org/content/ml5554/l.l/>. 

23 



24 CHAPTER 2. ETHICAL DECISION-MAKING 

3. El derecho a la lealtad corporativa y la libertad de que sea hecho un chivo expiatorio para catastrofes 
naturales, ineptitud de administracion u otras fuerzas mas alia del control del ingeniero. 

4. El derecho a buscar el mejoramiento personal mediante estudios postgraduados y envolverse en asocia- 
ciones profesionales. 

5. .El derecho a participar en actividades de partidos politicos fuera de las horas de trabajo. 

6. El derecho a solicitar posiciones superiores con otras companias sin que la companis en la que trabaje 
tome represalias contra el ingeniero. 

7. El derecho al debido proceso de ley y la libertad de que se le apliquen penalidades arbitrarias o despidos. 

8. El derecho a apelar por revision ante una asociacion profesional, ombudsman o arbitro independiente. 

9. El derecho a la privacidad personal. 

10. These rights are taken from Etica en la Practica Profesional de la Ingenieria by Wilfredo Munoz 
Roman published in 1998 by the Colegio de Ingenieros y Agrimensores de Puerto Rico and Universidad 
Politecnica de Puerto Rico 

Problematic Rights Claims (translated) 

1. The right to act in accordance with one's ethical conscience and to refuse to work on projects that go 
against one's conscience or personal or professional moral views. 

2. The right to express one's professional judgment and to make public declarations as long as these do 
not violate a corporation's rights to proprietary information. 

3. The right to corporate loyalty and freedom from being made a scapegoat for natural catastrophes, 
administrative ineptitude, and other forces that are beyond the control of the individual engineer. 

4. The right to better oneself through postgraduate studies and through participation in one's professional 
society. 

5. The right to participate in political activities outside of work hours. 

6. The right not to suffer retaliation from one's current employer when one seeks better employment 
elsewhere. 

7. The right to due process under the law and freedom from the application of artibrary penalties including 
being fired at will without just cause. 

8. The right to appeal judgments made against one before a professional association, ombudsman, or 
independent arbitrator. 

9. The right to personal privacy. 

Kantian Formalism, Part I: Aligning the moral motive and the moral act 

• Kant's moral philosophy has exercised substantial influence over our notions of right and duty. We 
begin with a brief summary of this theory based on the work, The Foundations of the Metaphysics 
of Morals. 

• Kant states that the only thing in this world that is good without qualification is a good will. He 
characterizes this will in terms of its motive, "duty for duty's sake." 

• Consider the following example. You see a boy drowning. Even though the water is rough and the 
current strong you are a good enough swimmer to save him. So while your inclination may be to give 
way to fear and walk away, you are duty-bound to save the drowning boy. 

• An action (saving or not saving the drowning boy) has moral worth depending on the the correct 
correlation of right action and right motive. The following table shows this. 

Duty for Duty's Sake 



25 





Motive = Inclination (desire for 
reward or fear) 


Motive = Duty 


Act Conforms to Duty 


You save the drowning boy for 
the reward. Act conforms to duty 
but is motivated by inclination. 
Has no moral worth. 


You save the drowning boy be- 
cause it is your duty. Act con- 
forms to duty and is for the sake 
of duty. Your act has moral 
worth. 


Act violates a duty. 


You don't save the drowning boy 
because you are too lazy to jump 
in. Act violates duty motivated 
by inclination. 


You drown trying to save the 
drowning boy. He also dies. Act 
fails to carry out duty but is mo- 
tivated by duty anyway. The act 
miscarries but since the motive is 
duty it still has moral worth. 



Table 2.1 



Part II of Kantian Formalism: Giving content to Duty for Duty's Sake 

A T* riTll C1i"^i"^C1 TVlAvri if IT *~1 CI + 1"! i"^ iTVrvvnCl C1 1 /-\r\ OVill VA^l 1I7lfmTl i^\4" + 1"! i-^ V^l+iriTiri TTT1 I I ' I ' 1"! 



Kant sees morality as the expression and realization of the rational will. The first formulation of this 

rational will is to will consistently and universally. 

This leads to the Categorical Imperative: I should act only on that maxim (=personal rule or 

rule that I give to myself) that can be converted into a universal law (a rule that applies 

to everybody) without self-contradiction. 

This formulation is an imperative because it commands the will of all reasonable beings. It is categorical 

because it commands without exceptions or conditions. The CI tells me unconditionally not to lie. It 

does not say, do not like unless it promotes your self interest to do so. 

The following table shows how to use the Categorical Imperative to determine whether I have a duty 

not to lie. 

Applying the Categorical Imperative 



1. Formulate your maxim (=personal rule) 


Whenever I am in a difficult situation, I should tell 
a lie. 


2. Universalize your maxim. 


Whenever anybody is in a difficult situation, he or 
she should tell a lie. 


3. Check for a contradiction (logical or practical) 


When I lie, I will the opposite for the universal law. 
Put differently, I will that everybody (but me) be a 
truth-teller and that everybody believe me a truth- 
teller. I then make myself the exception to this 
universal law. Thus my maxim (I am a liar) con- 
tradicts the law (everybody else is a truth-teller) 



Table 2.2 



Kantian Formalism, Part III: The Formula of the End 



When I will one thing as universal law and make myself the exeception in difficult circumstances, I am 
treating others, in Kantian terms, merely as means. 

This implies that I subordinate or bend them to my interests and projects without their consent. I 
do this by circumventing their autonomy through (1) force, (2) fraud (often deception), or (3) manip- 
ulation. Treating them with respect would involve telling them what I want (what are my plans and 
projects) and on this basis asking them to consent to particpate and help me. The extreme case for 
treating others merely as means is enslaving them. 



26 CHAPTER 2. ETHICAL DECISION-MAKING 

• We do on occasion treat others as means (and not as mere means) when we hire them as employees. 
But this is consistent with their autonomy and rational consent because we explain to them what is 
expected (we give them a job description) and compensate them for their efforts. For this reason there 
is a world of difference between hiring others and enslaving them. 

• The Formula of the End = Act so as to treat others (yourself included) always as ends 
and never merely as means. 

Some Key Definitions for a Rights Framework 

• Kantian formalism provides a foundation for respect for the intrinsic value of humans as autonomous 
rational beings. Using this as a point of departure, we can develop a method for identifying, spelling out, 
and justifying the rights and duties that go with professionalism. This framework can be summarized 
in four general propositions: 

• 1. Definition: A right is an essential capacity of action that others are obliged to recognize and 
respect. This definition follows from autonomy. Autonomy can be broken down into a series of specific 
capacities. Rights claims arise when we identify these capacities and take social action to protect them. 
Rights are inviolable and cannot be overridden even when overriding would bring about substantial 
public utility. 

• 2. All rights claims must satisfy three requirements. They must be (1) essential to the autonomy 
of individuals and (2) vulnerable so that they require special recognition and protection (on the part 
of both individuals and society). Moreover, the burden of recognizing and respecting a claim as a 
right must not deprive others of something essential. In other words, it must be (3) feasible for both 
individuals and social groups to recognize and respect legitimate rights claims. 

• 3. Definition: A duty is a rule or principle requiring that we both recognize and respect the legitimate 
rights claims of others. Duties attendant on a given right fall into three general forms: (a) duties not 
to deprive, (b) duties to prevent deprivation, and (c) duties to aid the deprived. 

• 4. Rights and duties are correlative; for every right there is a correlative series of duties to 
recognize and respect that right. 

• These four summary points together form a system of professional and occupational rights and correl- 
ative duties. 

Right Claim Justification Framework 

• Essential: To say that a right is essential to autonomy is to say that it highlights a capacity whose 
exercise is necessary to the general exercise of autonomy. For example, autonomy is based on certain 
knowledge skills. Hence, we have a right to an education to develop the knowledge required by au- 
tonomy, or we have a right to the knowledge that produces informed consent. In general, rights are 
devices for recognizing certain capacities as essential to autonomy and respecting individuals in their 
exercise of these capacities. 

• Vulnerable: The exercise of the capacity protected under the right needs protection. Individuals 
may interfere with us in our attempt to exercise our rights. Groups, corporations, and governments 
might overwhelm us and prevent us from exercising our essential capacities. In short, the exercise of 
the capacity requires some sort of protection. For example, an individual's privacy is vulnerable to 
violation. People can gain access to our computers without our authorization and view the information 
we have stored. They can even use this information to harm us in some way. The right to privacy, 
thus, protects certain capacities of action that are vulnerable to interference from others. Individual 
and social energy needs to be expended to protect our privacy. 

• Feasible: Rights make claims over others; they imply duties that others have. These claims must not 
deprive the correlative duty-holders of anything essential. In other words, my rights claims over you 
are not so extensive as to deprive you of your rights. My right to life should not deprive you of your 
right to self-protection were I to attack you. Thus, the scope of my right claims over you and the rest 
of society are limited by your ability to reciprocate. I cannot push my claims over you to recognize 
and respect my rights to the point where you are deprived of something essential. 



27 

Types of Duty Correlative to a Right 

• Duty not to deprive: We have a basic duty not to violate the rights of others. This entails that we 
must both recognize and respect these rights. For example, computing specialists have the duty not 
to deprive others of their rights to privacy by hacking into private files. 

• Duty to prevent deprivation: Professionals, because of their knowledge, are often in the position 
to prevent others from depriving third parties of their rights. For example, a computing specialist 
may find that a client is not taking sufficient pains to protect the confidentiality of information about 
customers. Outsiders could access this information and use it without the consent of the customers. 
The computing specialist could prevent this violation of privacy by advising the client on ways to 
protect this information, say, through encryption. The computing specialist is not about to violate the 
customers' rights to privacy. But because of special knowledge and skill, the computing specialist may 
be in a position to prevent others from violating this right. 

• Duty to aid the deprived: Finally, when others have their rights violated, we have the duty to 
aid them in their recovery from damages. For example, a computing specialist might have a duty to 
serve as an expert witness in a lawsuit in which the plaintiff seeks to recover damages suffered from 
having her right to privacy violated. Part of this duty would include accurate, impartial, and expert 
testimony. 

Application of Right /Duty Framework 

1. We can identify and define specific rights such as due process. Moreover, we can set forth some of the 
conditions involved in recognizing and respecting this right. 

2. Due Process can be justified by showing that it is essential to autonomy, vulnerable, and feasible. 

3. Right holders can be specified. 

4. Correlative duties and duty holders can be specified. 

5. Finally, the correlative duty-levels can be specified as the duties not to violate rights, duties to prevent 
rights violations (whenever feasible), and the duties to aid the deprived (whenever is feasible). 



28 



CHAPTER 2. ETHICAL DECISION-MAKING 



Example Rights Table: Due Process 



Right: Due Pro- 
cess 



Justification 



Right- 

Holder:Engineer 
as employee and 
member of profes- 
sional society. 



Correlative Duty- 
Holder: Engineer's 
Supervisor, of- 
ficials in profes- 
sional society. 



Duty Level 



Definition: The 
right to respond 
to organizational 
decisions that 

may harm one in 
terms of a serious 
organizational 
grievance proce- 
dure. Necessary 
Conditions: 1. 
Several levels of 
appeal. 2. Time 
limits to each 
level of appeal. 3. 
Written notice 
of grievance. 4. 

Peer representa- 
tion. 5. Outside 
arbitration. 



Essential: Due 

Process is essential 
in organizations 
to prevent the 
deprivation of 

other rights or 
to provide aid in 
the case of their 
deprivation. 



Vulnerable: 
Rights in general 
are not recognized 
in the economic 
sphere, especially 
in organizations. 



Feasible: Orga- 
nizations, have 
successfully im- 
plemented due 
process proce- 
dures. 



Professionals who 
are subject to pro- 
fessional codes of 
ethics. Supports 
professionals who 
are ordered to vi- 
olate professional 
standards. 



Human Resources, 
Management, 
Personnel Depart- 
ment . (Individuals 
with duty to de- 
sign, implement, 
and enforce a 
due process pol- 
icy) Corporate 
directors have the 
duty to make sure 
this is being done. 



Not to De- 
prive:Individuals 
cannot be fired, 
transferred, or 

demoted without 
due process 



Prevent Depriva- 
tion: Organiza- 
tions can prevent 
deprivation by de- 
signing and imple- 
menting a compre- 
hensive due pro- 
cess policy. 



Aid the De- 
privedBinding 
arbitration and 
legal measures 

must exist to aid 
those deprived of 
due process rights 



Table 2.3 



2,1,3 What you are going to do,,. 

Exercise: Develop a Rights Table 

1. You will be divided into small groups and each will be assigned a right claim taken from the above list. 

2. Describe the claim (essential capacity of action) made by the right. For example, due process claims 
the right to a serious organizational grievance procedure that will enable the right-holder to respond 
to a decision that has an adverse impact on his or her interests. It may also be necessary in some 
situations to specify the claim's necessary conditions. 

3. Justify the right claim using the rights justification framework. In other words show that the right 
claim is essential, vulnerable, and feasible. 

4. Be sure to show that the right is essential to autonomy. If it is vulnerable be sure to identify the 
standard threat. (A standard threat is an existing condition that threatens autonomy.) 

5. Provide an example of a situation in which the right claim becomes operative. For example, an engineer 
may claim a right to due process in order to appeal what he or she considers an unfair dismissal, transfer, 
or performance evaluation. 

6. Identify the correlative duty-holder(s) that need to take steps to recognize and respect the right. For 
example, private and government organizations may be duty-bound to create due process procedures 
to recognize and respect this right. 



29 

7. Further spell out the right by showing what actions the correlative duties involve. For example, a 
manager should not violate an employee's due process right by firing him or her without just cause. 
The organization's human resources department might carry out a training program to help managers 
avoid depriving employees of this right. The organization could aid the deprived by designing and 
implementing binding arbitration involving an impartial third party. 

Be prepared to debrief on your right claim to the rest of the class. When other groups are debriefing, you are 
free to challenge them on whether their claim is essential to autonomy, whether they have identified a valid 
"standard threat," and whether the correlative duties are feasible or deprive others of something essential. 
Your goal as a class is to have a short but effective list of rights that professionals take with them to the 
workplace. 

2.1.4 Conclusion 

Conclusion: Topics for Further Reflection 

• Not every claim to a right is a legitimate or justifiable claim. The purpose of this framework is to get 
you into the habit of thinking critically and skeptically about the rights claims that you and others 
make. Every legitimate right claim is essential, vulnerable, and feasible. Correlative duties are sorted 
out according to different levels (not to deprive, prevent deprivation, and aid the deprived); this, 
in turn, is based on the capacity of the correlative duty holder to carry them out. Finally, duties 
correlative to rights cannot deprive the duty-holder of something essential. 

• Unless you integrate your right and its correlative duties into the context of your professional or 
practical domain, it will remain abstract and irrelevant. Think about your right in the context of 
the real world. Think of everyday situations in which the right and its correlative duties will arise. 
Invent cases and scenarios. If you are an engineering student, think of informed consent in terms of 
the public's right to understand and consent to the risks associated with engineering projects. If you 
are a computing student think of what you can do with computing knowledge and skills to respect or 
violate privacy rights. Don't stop with an abstract accounting of the right and its correlative duties. 

• Rights and duties underlie professional codes of ethics. But this is not always obvious. For example, 
the right of free and informed consent underlies much of the engineer's interaction with the public, 
especially the code responsibility to hold paramount public health, safety, and welfare. Look at the 
different stakeholder relations covered in a code of ethics. (In engineering this would include public, 
client, profession, and peer.) What are the rights and duties outlined in these stakeholder relations? 
How are they covered in codes of ethics? 

• This module is effective in counter-acting the tendency to invent rights and use them to rationalize 
dubious actions and intentions. Think of rights claims as credit backed by a promise to pay at a later 
time. If you make a right claim, be ready to justify it. If someone else makes a right claim, make them 
back it up with the justification framework presented in this module. 



2.2 Three Frameworks for Ethical Decision Making and Good Com- 
puting Reports 2 

2.2.1 Module Introduction 

In this module you will learn and practice three frameworks designed to integrate ethics into decision making 
in the areas of practical and occupational ethics. The first framework divides the decision making process 
into four stages: problem specification, solution generation, solution testing, and solution implementation. 
It is based on an analogy between ethics and design problems that is detailed in a table presented below. 



2 This content is available online at <http://cnx.Org/content/ml3757/l.17/>. 



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CHAPTER 2. ETHICAL DECISION-MAKING 



The second framework focuses on the process of solution testing by providing four tests that will help you to 
evaluate and rank alternative courses of action. The reversibility, harm/beneficence, and public identification 
tests each "encapsulate" or summarize an important ethical theory. A value realization test assesses courses 
of action in terms of their ability to realize or harmonize different moral and nonmoral values. Finally, 
a feasibility test will help you to uncover interest, resource, and technical constraints that will affect and 
possibly impede the realization of your solution or decision. Taken together, these three frameworks will 
help steer you toward designing and implementing ethical decisions the professional and occupational areas. 
Two online resources provide more extensive background information. The first, 

www.computingcases.org, provides background information on the ethics tests, socio-technical analy- 
sis, and intermediate moral concepts. The second, http://onlineethics.org/essays/education/teaching.html, 
explores in more detail the analogy between ethics and design problems. Much of this information will be 
published in Good Computing: A Virtue Approach to Computer Ethics, a textbook of cases and decision 
making techniques in computer ethics that is being authored by Chuck Huff, William Frey, and Jose A. 
Cruz-Cruz. 

2.2.2 Problem-Solving or Decision-Making Framework: Analogy between ethics 
and design 

Traditionally, decision making frameworks in professional and occupational ethics have been taken from 
rational decision procedures used in economics. While these are useful, they lead one to think that ethical 
decisions are already "out there" waiting to be discovered. In contrast, taking a design approach to ethical 
decision making emphasizes that ethical decisions must be created, not discovered. This, in turn, emphasizes 
the importance of moral imagination and moral creativity. Carolyn Whitbeck in Ethics in Engineering 
Practice and Research describes this aspect of ethical decision making through the analogy she draws between 
ethics and design problems in chapter one. Here she rejects the idea that ethical problems are multiple choice 
problems. We solve ethical problems not by choosing between ready made solutions given with the situation; 
rather we use our moral creativity and moral imagination to design these solutions. Chuck Huff builds on 
this by modifying the design method used in software engineering so that it can help structure the process of 
framing ethical situations and creating actions to bring these situations to a successful and ethical conclusion. 
The key points in the analogy between ethical and design problems are summarized in the table presented 
just below. 



Analogy between design and ethics problem-solving 


Design Problem 


Ethical Problem 


Construct a prototype that optimizes (or satisfices) 
designated specifications 


Construct a solution that integrates and realizes 
ethical values (justice, responsibility, reasonable- 
ness, respect, and safety) 


Resolve conflicts between different specifications by 
means of integration 


Resolve conflicts between values (moral vs. moral 
or moral vs. non-moral) by integration 


Test prototype over the different specifications 


Test solution over different ethical considerations 
encapsulated in ethics tests 


continued on next page 



31 



Implement tested design over background con- 
straints 



Implement ethically tested solution over resource, 
interest, and technical constraints 



Table 2.4 



2,2,3 Software Development Cycle: Four Stages 

(1) problem specification, (2) solution generation, (3) solution testing, and (4) solution implementation. 



2,2,4 Problem specification 

Problem specification involves exercising moral imagination to specify the socio-technical system (including 
the stakeholders) that will influence and will be influenced by the decision we are about to make. Stating the 
problem clearly and concisely is essential to design problems; getting the problem right helps structure and 
channel the process of designing and implementing the solution. There is no algorithm available to crank out 
effective problem specification. Instead, we offer a series of guidelines or rules of thumb to get you started 
in a process that is accomplished by the skillful exercise of moral imagination. 

For a broader problem framing model see Harris, Pritchard, and Rabins, Engineering Ethics: Con- 
cepts and Cases, 2nd Edition, Belmont, CA: Wadsworth, 2000, pp. 30-56. See also Cynthia Brincat and 
Victoria Wike, Morality and Professional Life: Values at Work, New Jersey: Prentice Hall, 1999. 

Different Ways of Specifying the Problem 

• Many problems can be specified as disagreements. For example, you disagree with your supervisor over 
the safety of the manufacturing environment. Disagreements over facts can be resolved by gathering 
more information. Disagreements over concepts (you and your supervisor have different ideas of what 
safety means) require working toward a common definition. 

• Other problems involve conflicting values. You advocate installing pollution control technology because 
you value environmental quality and safety. Your supervisor resists this course of action because 
she values maintaining a solid profit margin. This is a conflict between a moral value (safety and 
environmental quality) and a nonmoral value (solid profits). Moral values can also conflict with one 
another in a given situation. Using John Doe lawsuits to force Internet Service Providers to reveal 
the real identities of defamers certainly protects the privacy and reputations of potential targets of 
defamation. But it also places restrictions on legitimate free speech by making it possible for powerful 
wrongdoers to intimidate those who would publicize their wrongdoing. Here the moral values of privacy 
and free speech are in conflict. Value conflicts can be addressed by harmonizing the conflicting values, 
compromising on conflicting values by partially realizing them, or setting one value aside while realizing 
the other (= value trade offs). 

• If you specify your problem as a disagreement, you need to describe the facts or concepts about which 
there is disagreement. 

• If you specify your problem as a conflict, you need to describe the values that conflict in the situation. 

• One useful way of specifying a problem is to carry out a stakeholder analysis. A stakeholder is any 
group or individual that has a vital interest at risk in the situation. Stakeholder interests frequently 
come into conflict and solving these conflicts requires developing strategies to reconcile and realize the 
conflicting stakes. 

• Another way of identifying and specifying problems is to carry out a socio-technical analysis. Socio- 
technical systems (STS) embody values. Problems can be anticipated and prevented by specifying 
possible value conflicts. Integrating a new technology, procedure, or policy into a socio-technical 
system can create three kinds of problem. (1) Conflict between values in the technology and those in 
the STS. For example, when an attempt is made to integrate an information system into the STS of a 
small business, the values present in an information system can conflict with those in the socio-technical 
system. (Workers may feel that the new information system invades their privacy.) (2) Amplification 



32 



CHAPTER 2. ETHICAL DECISION-MAKING 



of existing value conflicts in the STS 

value conflict. Digitalizing textbooks 

and disseminate on the Internet. (3) 

technical system may set in motion 

socio-technical system. For example, 

long term environmental harm when 

environment. 

The following table helps summarize some of these problem categories and then outlines generic solu 

tions. 



. The introduction of a new technology may magnify an existing 
may undermine copyrights because digital media is easy to copy 
Harmful consequences. Introducing something new into a socio- 
a chain of events that will eventually harm stakeholders in the 
giving laptop computers to public school students may produce 
careless disposal of spent laptops releases toxic materials into the 



Problem Type 


Sub-Type 


Solution Outline 


Disagreement 


Factual 


Type and mode of gathering information 


Conceptual 


Concept in dispute and method for 
agreeing on its definition 


Conflict 


Moral vs. Moral 


Value Integrative 


Partially Value In- 
tegrative 


Trade Off 


Non-moral vs. 
moral 


Non-moral vs. 
non-moral 


Framing 


Corruption 


Strategy for main- 
taining integrity 


Strategy for 
restoring justice 


Value integrative, 
design strategy 


Social Justice 


Value Realization 


Intermediate 
Moral Value 


Public Welfare, 
Faithful Agency, 
Professional In- 
tegrity, Peer 
Collegiality 


Realizing Value 


Removing value 
conflicts 


Prioritizing values 
for trade offs 



Table 2.5 



If you are having problems specifying your problem 

• Try identifying the stakeholders. Stakeholders are any group or individual with a vital interest at stake 
in the situation at hand. 

• Project yourself imaginatively into the perspectives of each stakeholders. How does the situation look 
from their standpoint? What are their interests? How do they feel about their interests? 

• Compare the results of these different imaginative projections. Do any stakeholder interests conflict? 
Do the stakeholders themselves stand in conflict? 

• If the answer to one or both of these questions is "yes" then this is your problem statement. How does 
one reconcile conflicting stakeholders or conflicting stakeholder interests in this situation? 

Framing Your Problem 

• We miss solutions to problems because we choose to frame them in only one way. 

• For example, the Mountain Terrorist Dilemma is usually framed in only one way: as a dilemma, that 
is, a forced decision between two equally undesirable alternatives. (Gilbane Gold is also framed as a 
dilemma: blow the whistle on Z-Corp or go along with the excess polution.) 

• Framing a problem differently opens up new horizons of solution. Your requirement from this point on 
in the semester is to frame every problem you are assigned in at least two different ways. 



33 

• For examples of how to frame problems using socio-technical system analysis see module ml4025. 

• These different frames are summarized in the next box below. 

Different Frames for Problems 

• Technical Frame: Engineers frame problems technically, that is, they specify a problem as raising a 
technical issue and requiring a technical design for its resolution. For example, in the Hughes case, a 
technical frame would raise the problem of how to streamline the manufacturing and testing processes 
of the chips. 

• Physical Frame: In the Laminating Press case, the physical frame would raise the problem of how the 
layout of the room could be changed to reduce the white powder. Would better ventilation eliminate 
or mitigate the white powder problem? 

• Social Frame: In the "When in Aguadilla" case, the Japanese engineer is uncomfortable working 
with the Puerto Rican woman engineer because of social and cultural beliefs concerning women still 
widely held by men in Japan. Framing this as a social problem would involve asking whether there 
would be ways of getting the Japanese engineer to see things from the Puerto Rican point of view. 

• Financial or Market-Based Frames: The DOE, in the Risk Assessment case below, accuses the 
laboratory and its engineers of trying to extend the contract to make more money. The supervisor 
of the head of the risk assessment team pressures the team leader to complete the risk assessment as 
quickly as possible so as not to lose the contract. These two framings highlight financial issues. 

• Managerial Frame: As the leader of the Puerto Rican team in the "When in Aguadilla" case, you 
need to exercise leadership in your team. The refusal of the Japanese engineer to work with a member 
of your team creates a management problem. What would a good leader, a good manager, do in this 
situation? What does it mean to call this a management problem? What management strategies would 
help solve it? 

• Legal Frame: OSHA may have clear regulations concerning the white powder produced by laminating 
presses. How can you find out about these regulations? What would be involved in complying with 
them? If they cost money, how would you get this money? These are questions that arise when you 
frame the Laminating Press case as a legal problem. 

• Environmental Framing: Finally, viewing your problem from an environmental frame leads you to 
consider the impact of your decision on the environment. Does it harm the environment? Can this 
harm be avoided? Can it be mitigated? Can it be offset? (Could you replant elsewhere the trees you cut 
down to build your new plant?) Could you develop a short term environmental solution to "buy time" 
for designing and implementing a longer term solution? Framing your problem as an environmental 
problem requires that you ask whether this solution harms the environment and whether this harming 
can be avoided or remedied in some other way. 

2,2,5 Solution Generation 

In solution generation, agents exercise moral creativity by brainstorming to come up with solution options 
designed to resolve the disagreements and value conflicts identified in the problem specification stage. Brain- 
storming is crucial to generating nonobvious solutions to difficult, intractable problems. This process must 
take place within a non-polarized environment where the members of the group respect and trust one another. 
(See the module on the Ethics of Group Work for more information on how groups can be successful and 
pitfalls that commonly trip up groups.) Groups effectively initiate the brainstorming process by suspending 
criticism and analysis. After the process is completed (say, by meeting a quota), then participants can refine 
the solutions generated by combining them, eliminating those that don't fit the problem, and ranking them 
in terms of their ethics and feasibility. If a problem can't be solved, perhaps it can be dissolved through 
reformulation. If an entire problem can't be solve, perhaps the problem can be broken down into parts some 
of which can be readily solved. 

Having trouble generating solutions? 



34 CHAPTER 2. ETHICAL DECISION-MAKING 

• One of the most difficult stages in problem solving is to jump start the process of brainstorming 
solutions. If you are stuck then here are some generic options guaranteed to get you "unstuck." 

• Gather Information: Many disagreements can be resolved by gathering more information. Because 
this is the easiest and least painful way of reaching consensus, it is almost always best to start here. 
Gathering information may not be possible because of different constraints: there may not be enough 
time, the facts may be too expensive to gather, or the information required goes beyond scientific or 
technical knowledge. Sometimes gathering more information does not solve the problem but allows for 
a new, more fruitful formulation of the problem. Harris, Pritchard, and Rabins in Engineering Ethics: 
Concepts and Cases show how solving a factual disagreement allows a more profound conceptual 
disagreement to emerge. 

• Nolo Contendere. Nolo Contendere is latin for not opposing or contending. Your interests may 
conflict with your supervisor but he or she may be too powerful to reason with or oppose. So your only 
choice here is to give in to his or her interests. The problem with nolo contendere is that non-opposition 
is often taken as agreement. You may need to document (e.g., through memos) that your choosing not 
to oppose does not indicate agreement. 

• Negotiate. Good communication and diplomatic skills may make it possible to negotiate a solution 
that respects the different interests. Value integrative solutions are designed to integrate conflicting 
values. Compromises allow for partial realization of the conflicting interests. (See the module, The 
Ethics of Team Work, for compromise strategies such as logrolling or bridging.) Sometimes it may be 
necessary to set aside one's interests for the present with the understanding that these will be taken 
care of at a later time. This requires trust. 

• Oppose. If nolo contendere and negotiation are not possible, then opposition may be necessary. 
Opposition requires marshalling evidence to document one's position persuasively and impartially. It 
makes use of strategies such as leading an "organizational charge" or "blowing the whistle." For more 
on whistle-blowing consult the discussion of whistle blowing in the Hughes case that can be found at 
computing cases. 

• Exit. Opposition may not be possible if one lacks organizational power or documented evidence. Nolo 
contendere will not suffice if non-opposition implicates one in wrongdoing. Negotiation will not succeed 
without a necessary basis of trust or a serious value integrative solution. As a last resort, one may 
have to exit from the situation by asking for reassignment or resigning. 

2,2,6 Solution Testing: The solutions developed in the second stage must be 
tested in various ways, 

1. Reversibility: Are they reversible between the agent and key stakeholders? 

2. Harm/Beneficence: Do they minimize harm? Do they produce benefits that are justly distributed 
among stakeholders? 

3. Public Identification: Are these actions with which I am willing to be publicly identified? Does these 
actions identify me as a moral person? 

4. Value: Do these actions realize key moral values and instantiate moral virtues? 

5. Code: A code test can be added that refers to a professional or occupational code of ethics. Do the 
solutions comply with the professional's or practitioner's code of ethics? 

6. The solution evaluation matrix presented just below provides a nice way of modeling and summarizing 
the process of solution testing. 



35 



Solution/Test 


Reversibility 


Harm/ Benefi- 
cence 


Virtue 


Value 


Code 


Descrip-tion 


Is the solution 
reversible with 
stakeholders? 
Does it honor 
basic rights? 


Does the so- 
lution produce 
the best bene- 
fit/harm ratio? 
Does the solu- 
tion maximize 
utility? 


Does the so- 
lution express 
and integrate 
key virtues? 


Moral val- 
ues realized? 
Moral values 
frustrated? 
Value conflicts 
resolved or 
exacerbated? 


Does the so- 
lution violate 
any code 
provisions? 


Best solution 












Second Best 












Worst 













Table 2.6 



2.2.7 Solution Implementation 

The chosen solution must be examined in terms of how well it responds to various situational constraints 
that could impede its implementation. What will be its costs? Can it be implemented within necessary time 
constraints? Does it honor recognized technical limitations or does it require pushing these back through 
innovation and discovery? Does it comply with legal and regulatory requirements? Finally, could the 
surrounding organizational, political, and social environments give rise to obstacles to the implementation 
of the solution? In general this phase requires looking at interest, technical, and resource constraints or 
limitations. A Feasibility Matrix helps to guide this process. 

The Feasibility Tests focuses on situational constraints. How could these hinder the implementation of 
the solution? Should the solution be modified to ease implementation? Can the constraints be removed or 
remodeled by negotiation, compromise, or education? Can implementation be facilitated by modifying both 
the solution and changing the constraints? 



Feasibility Matrix 


Resource Constraints 


Technical Constraints 


Interest Constraints 






Personalities 


Time 




Organizational 


Cost 


Applicable Technology 


Legal 


Materials 


Manufacturability 


Social, Political, Cultural 



Table 2.7 



Different Feasibility Constraints 

1. The Feasibility Test identifies the constraints that could interfere with realizing a solution. This test also 
sorts out these constraints into resource (time, cost, materials), interest (individuals, organizations, 
legal, social, political), and technical limitations. By identifying situational constraints, problem- 
solvers can anticipate implementation problems and take early steps to prevent or mitigate them. 

2. Time. Is there a deadline within which the solution has to be enacted? Is this deadline fixed or 
negotiable? 



36 CHAPTER 2. ETHICAL DECISION-MAKING 

3. Financial. Are there cost constraints on implementing the ethical solution? Can these be extended 
by raising more funds? Can they be extended by cutting existing costs? Can agents negotiate for more 
money for implementation? 

4. Technical. Technical limits constrain the ability to implement solutions. What, then, are the technical 
limitations to realizing and implementing the solution? Could these be moved back by modifying the 
solution or by adopting new technologies? 

5. Manufacturability. Are there manufacturing constraints on the solution at hand? Given time, cost, 
and technical feasibility, what are the manufacturing limits to implementing the solution? Once again, 
are these limits fixed or flexible, rigid or negotiable? 

6. Legal. How does the proposed solution stand with respect to existing laws, legal structures, and 
regulations? Does it create disposal problems addressed in existing regulations? Does it respond to 
and minimize the possibility of adverse legal action? Are there legal constraints that go against the 
ethical values embodied in the solution? Again, are these legal constraints fixed or negotiable? 

7. Individual Interest Constraints. Individuals with conflicting interests may oppose the implemen- 
tation of the solution. For example, an insecure supervisor may oppose the solution because he fears 
it will undermine his authority. Are these individual interest constraints fixed or negotiable? 

8. Organizational. Inconsistencies between the solution and the formal or informal rules of an orga- 
nization may give rise to implementation obstacles. Implementing the solution may require support 
of those higher up in the management hierarchy. The solution may conflict with organization rules, 
management structures, traditions, or financial objectives. Once again, are these constraints fixed or 
flexible? 

9. Social, Cultural, or Political. The socio-technical system within which the solution is to be imple- 
mented contains certain social structures, cultural traditions, and political ideologies. How do these 
stand with respect to the solution? For example, does a climate of suspicion of high technology threaten 
to create political opposition to the solution? What kinds of social, cultural, or political problems could 
arise? Are these fixed or can they be altered through negotiation, education, or persuasion? 

2.2.8 Ethics Tests For Solution Evaluation 

Three ethics tests (reversibility, harm/beneficence, and public identification) encapsulate three ethical ap- 
proaches (deontology, utilitarianism, and virtue ethics) and form the basis of stage three of the SDC, solution 
testing. A fourth test (a value realization test) builds upon the public identification/virtue ethics test by 
evaluating a solution in terms of the values it harmonizes, promotes, protects, or realizes. Finally a code test 
provides an independent check on the ethics tests and also highlights intermediate moral concepts such as 
safety, health, welfare, faithful agency, conflict of interest, confidentiality, professional integrity, collegiality, 
privacy, property, free speech, and equity/access). The following section provides advice on how to use these 
tests. More information can be found at www.computingcases.org. 

2.2.9 Setting Up the Ethics Tests: Pitfalls to avoid 

Set-Up Pitfalls: Mistakes in this area lead to the analysis becoming unfocused and getting lost in irrelevancies. 
(a) Agent-switching where the analysis falls prey to irrelevancies that crop up when the test application is 
not grounded in the standpoint of a single agent, (b) Sloppy action-description where the analysis fails 
because no specific action has been tested, (c) Test-switching where the analysis fails because one test is 
substituted for another. (For example, the public identification and reversibility tests are often reduced 
to the harm/beneficence test where harmful consequences are listed but not associated with the agent or 
stakeholders.) 

Set up the test 

1. Identify the agent (the person who is going to perform the action) 

2. Describe the action or solution that is being tested (what the agent is going to do or perform) 



37 

3. Identify the stakeholders (those individuals or groups who are going to be affected by the action), and 
their stakes (interests, values, goods, rights, needs, etc. 

4. Identify, sort out, and weigh the consequences (the results the action is likely to bring about) 

2.2.10 Harm/Beneficence Test 

• What harms would accompany the action under consideration? Would it produce physical or mental 
suffering, impose financial or non-financial costs, or deprive others of important or essential goods? 

• What benefits would this action bring about? Would it increase safety, quality of life, health, security, 
or other goods both moral and non-moral? 

• What is the magnitude of each these consequences? Magnitude includes likelihood it will occur (prob- 
ability), the severity of its impact (minor or major harm) and the range of people affected. 

• Identify one or two other viable alternatives and repeat these steps for them. Some of these may be 
modifications of the basic action that attempt to minimize some of the likely harms. These alternatives 
will establish a basis for assessing your alternative by comparing it with others. 

• Decide on the basis of the test which alternative produces the best ratio of benefits to harms? 

• Check for inequities in the distribution of harms and benefits. Do all the harms fall on one individual 
(or group)? Do all of the benefits fall on another? If harms and benefits are inequitably distributed, 
can they be redistributed? What is the impact of redistribution on the original solution imposed? 

Pitfalls of the Harm/Beneficence Test 

1. "Paralysis of Analysis" comes from considering too many consequences and not focusing only on those 
relevant to your decision. 

2. Incomplete Analysis results from considering too few consequences. Often it indicates a failure of moral 
imagination which, in this case, is the ability to envision the consequences of each action alternative. 

3. Failure to compare different alternatives can lead to a decision that is too limited and one-sided. 

4. Failure to weigh harms against benefits occurs when decision makers lack the experience to make the 
qualitative comparisons required in ethical decision making. 

5. Finally, justice failures result from ignoring the fairness of the distribution of harms and benefits. This 
leads to a solution which may maximize benefits and minimize harms but still give rise to serious 
injustices in the distribution of these benefits and harms. 

2.2.11 Reversibility Test 

1. Set up the test by (i) identifying the agent, (ii) describing the action, and (iii) identifying the stake- 
holders and their stakes. 

2. Use the stakeholder analysis to identify the relations to be reversed. 

3. Reverse roles between the agent (you) and each stakeholder: put them in your place (as the agent) 
and yourself in their place (as the one subjected to the action). 

4. If you were in their place, would you still find the action acceptable? 

Cross Checks for Reversibility Test (These questions help you to check if you have carried out 
the reversibility test properly.) 

• Does the proposed action treat others with respect? (Does it recognize their autonomy or circumvent 
it?) 

• Does the action violate the rights of others? (Examples of rights: free and informed consent, privacy, 
freedom of conscience, due process, property, freedom of expression) 

• Would you recommend that this action become a universal rule? 

• Are you, through your action, treating others merely as means? 



38 CHAPTER 2. ETHICAL DECISION-MAKING 

Pitfalls of the Reversibility Test 

• Leaving out a key stakeholder relation 

• Failing to recognize and address conflicts between stakeholders and their conflicting stakes 

• Confusing treating others with respect with capitulating to their demands ("Reversing with Hitler") 

• Failing to reach closure, i.e., an overall, global reversal assessment that takes into account all the 
stakeholders the agent has reversed with. 

2.2.12 Steps in Applying the Public Identification Test 

• Set up the analysis by identifying the agent, describing the action, and listing the key values or virtues 
at play in the situation. 

• Association the action with the agent. 

• Describe what the action says about the agent as a person. Does it reveal him or her as someone 
associated with a virtue or a vice? 

Alternative Version of Public Identification 

• Does the action under consideration realize justice or does it pose an excess or defect of justice? 

• Does the action realize responsibility or pose an excess or defect of responsibility? 

• Does the action realize reasonableness or pose too much or too little reasonableness? 

• Does the action realize honesty or pose too much or too little honesty? 

• Does the action realize integrity or pose too much or too little integrity? 

Pitfalls of Public Identification 

• Action not associated with agent. The most common pitfall is failure to associate the agent and the 
action. The action may have bad consequences and it may treat individuals with respect but these 
points are not as important in the context of this test as what they imply about the agent as a person 
who deliberately performs such an action. 

• Failure to specify moral quality, virtue, or value. Another pitfall is to associate the action and agent 
but only ascribe a vague or ambiguous moral quality to the agent. To say, for example, that willfully 
harming the public is bad fails to zero in on precisely what moral quality this ascribes to the agent. 
Does it render him or her unjust, irresponsible, corrupt, dishonest, or unreasonable? The virtue list 
given above will help to specify this moral quality. 

2.2.13 Code of Ethics Test 

• Does the action hold paramount the health, safety, and welfare of the public, i.e., those affected by the 
action but not able to participate in its design or execution? 

• Does the action maintain faithful agency with the client by not abusing trust, avoiding conflicts of 
interest, and maintaining confidences? 

• Is the action consistent with the reputation, honor, dignity, and integrity of the profession? 

• Does the action serve to maintain collegial relations with professional peers? 

2.2.14 Meta Tests 

• The ethics and feasibility tests will not always converge on the same solution. There is a complicated 
answer for why this is the case but the simple version is that the tests do not always agree on a 
given solution because each test (and the ethical theory it encapsulates) covers a different domain or 
dimension of the action situation. Meta tests turn this disadvantage to your advantage by feeding the 
interaction between the tests on a given solution back into the evaluation of that solution. 



39 

When the ethics tests converge on a given solution, this convergence is a sign of the strength and 
robustness of the solution and counts in its favor. 

When a given solution responds well to one test but does poorly under another, this is a sign that the 
solution needs further development and revision. It is not a sign that one test is relevant while the 
others are not. Divergence between test results is a sign that the solution is weak. 



2.2.15 Application Exercise 

You will now practice the four stages of decision making with a real world case. This case, Risk Assessment, 
came from a retreat on Business, Science, and Engineering Ethics held in Puerto Rico in December 1998. It 
was funded by the National Science Foundation, Grant SBR 9810253. 
Risk Assessment Scenario 

Case Scenario: You supervise a group of engineers working for a private laboratory with expertise in nuclear 
waste disposal and risk assessment. The DOE (Department of Energy) awarded a contract to your laboratory 
six years ago to do a risk assessment of various nuclear waste disposal sites. During the six years in which 
your team has been doing the study, new and more accurate calculations in risk assessment have become 
available. Your laboratory's study, however, began with the older, simpler calculations and cannot integrate 
the newer without substantially delaying completion. You, as the leader of the team, propose a delay to the 
DOE on the grounds that it is necessary to use the more advanced calculations. Your position is that the 
laboratory needs more time because of the extensive calculations required; you argue that your group must 
use state of the art science in doing its risk assessment. The DOE says you are using overly high standards 
of risk assessment to prolong the process, extend the contract, and get more money for your company. They 
want you to use simpler calculations and finish the project; if you are unwilling to do so, they plan to find 
another company that thinks differently. Meanwhile, back at the laboratory, your supervisor (a high level 
company manager) expresses to you the concern that while good science is important in an academic setting, 
this is the real world and the contract with the DOE is in jeopardy. What should you do? 

Part One: Problem Specification 

1. Specify the problem in the above scenario. Be as concise and specific as possible 

2. Is your problem best specifiable as a disagreement? Between whom? Over what? 

3. Can your problem be specified as a value conflict? What are the values in conflict? Are the moral, 
nonmoral, or both? 

Part Two: Solution Generation 

1. Quickly and without analysis or criticism brainstorm 5 to ten solutions 

2. Refine your solution list. Can solutions be eliminated? (On what basis?) Can solutions be combined? 
Can solutions be combined as plan a and plan b? 

3. If you specified your problem as a disagreement, how do your solutions resolve the disagreement? Can 
you negotiate interests over positions? What if your plan of action doesn't work? 

4. If you formulated your problem as a value conflict, how do your solutions resolve this conflict? By 
integrating the conflicting values? By partially realizing them through a value compromise? By trading 
one value off for another? 

Part Three: Solution Testing 

1. Construct a solution evaluation matrix to compare two to three solution alternatives. 

2. Choose a bad solution and then compare to it the two strongest solutions you have. 

3. Be sure to avoid the pitfalls described above and set up each test carefully. 

Part Four: Solution Implementation 



40 CHAPTER 2. ETHICAL DECISION-MAKING 

1. Develop an implementation plan for your best solution. This plan should anticipate obstacles and offer 
means for overcoming them. 

2. Prepare a feasibility table outlining these issues using the table presented above. 

3. Remember that each of these feasibility constraints is negotiable and therefore flexible. If you choose 
to set aside a feasibility constraint then you need to outline how you would negotiate the extension of 
that constraint. 



Decision-Making Presentation 

This media object is a downloadable file. Please view or download it at 
<Decision Making Manual V4.pptx> 

Figure 2.1: Clicking on this figure will allow you to open a presentation designed to introduce problem 
solving in ethics as analogous to that in design, summarize the concept of a socio-technical system, and 
provide an orientation in the four stages of problem solving. This presentation was given February 28, 
2008 at UPRM for ADMI 6005 students, Special Topics in Research Ethics. 



Decision Making Worksheet 

This media object is a downloadable file. Please view or download it at 
<Decision Making Worksheet. docx> 

Figure 2.2: This exercise is designed to give you practice with the three frameworks described in this 
module. It is based on the case, "When in Aguadilla." 



Test Rubric Fall 2009: Problem-Solving 

[Media Object] 3 

2.3 Values-Based Decision-Making in Gilbane Gold 4 
2,3.1 Module Introduction 

The Federal Sentencing Guidelines introduced in the early 1990's have transformed the way businesses 
respond to ethics. Formerly, corporations relied on compliance measures which became activated only after 
wrongdoing occurred. Violations occurred and compliance responses consisted of identifying and punishing 
those responsible. But the Federal Sentencing Guidelines push corporations toward a much more proactive 
stance; if a corporation is found guilty of law violation, its punishment is determined by the measures 
the corporation has already implemented to prevent the crime as well as the measures the corporation 
develops in response to the crime to mitigate it and prevent future reoccurrences. Working to prevent crime, 
accepting responsibility for crimes that could not be prevented, and learning from past mistakes all serve to 
"flag" corporate intention. In other words, corporations can demonstrate good intentions by documenting 



3 This media object is a downloadable file. Please view or download it at 
<PE_Rubric_EO_S09.docx> 

4 This content is available online at <http://cnx.Org/content/ml5783/l.4/>. 



41 

measures implemented to prevent crime and by showing a "responsive adjustment" to crimes they could not 
prevent. 

It is in this new corporate context that corporations have begun to adopt values-based decision making. 
Instead of setting forth rules that outline minimum levels of forced compliance, they now ask employees 
to work beyond the moral minimum and seek occasions to actually realize or enhance moral value. In the 
decision making context, employees ask: (1) What can I do to make this a more just environment? (2) 
How do I go about respecting my co-workers? and (3) How do I identify and carry out my responsibilities, 
including social responsibilities, in my daily work?" These questions, representing instances of values-based 
decision-making, serve to change your focus from getting by with the moral minimum to realigning your 
moral and workplace efforts toward moral excellence. 

In this module you will learn about ethical leadership, ethical decision-making, corporate social responsi- 
bility, and corporate governance. The occasion for this learning is the classical ethics video, "Gilbane Gold." 
You will view the video and practice values-based decision-making from within the role of David Jackson, 
the young engineer around whom the narrative of this video is built. To get you started, you will use the 
values portrayed in the University of Puerto Rico's College of Business Administration Statement of Val- 
ues. Module sections will outline what you will be doing and what you need to know as well as provide 
opportunities for you to reflect on what you have learned upon completion of this module. 

2,3.2 What you need to know... 

Value-Based Decision Making 

In value-based decision-making, you use moral values to pose problems and solutions. For example, problems 
can be posed as conflicts between values (moral vs. non-moral or moral vs. moral), lack of information 
about how to realize or maintain values, and situations where key values need to be defended. The point in 
value-based decision making is to design solutions that realize the maximum number of values possible by 
integrating them, drawing successful compromises between them, or choosing to act upon the most important 
value given the situation. In this module, you will be working from within David Jackson's position to design 
a solution to his problem that best responds to the value needs in his situation. 

Gilbane Gold 

• You are David Jackson a young engineer working for the computer manufacturer, Z-Corp. Your studies 
into the waste emissions of Z-Corp indicate that they are a little bit over the boarderline of what is 
legally acceptable in the Gilbane metropolitan area. Two further issues complicate your findings. (1) 
Gilbane draws sludge from the river and sells it to farmers to cover their fields; if heavy metals are 
present in this sludge, they will be passed on to consumers who eat the vegetables grown in fields covered 
with this "Gilbane Gold." This could produce long and short term health problems for the Gilbane 
community. (2) Z-Corp has just entered into a new agreement with a Japanese company that will 
produce a five- fold increase in demand for their product. While this will also increase their emissions 
of heavy metals into the water supply by the same amount, it will not violate city regulations because 
these regulations only take into account the concentration of heavy metals in each discharge. Z-Corp 
merely dilutes the heavy metals dumped into Gilbane's water supply to reflect acceptable concentration 
levels. David Jackson holds that this loophole in environmental regulations could endanger the health 
and safety of the citizens in the Gilbane. But he has trouble sharing these concerns with his supervisors, 
Diane Collins, Phil Port, and Frank Seeders. 

• David (you) has made several efforts to make his concerns known to Z-Corp officials, including Phil 
Port, Frank Seeders, and Diane Collins. Their response is that spending money on increased pollution 
control measures will threaten Z-Corp's thin profit margin. Diane puts the issue even more strongly 
when she says that Z-Corp's social responsibility is to provide the Gilbane community with good jobs 
and to obey local environmental regulations. If the city wants stricter regulations, then they need to 
pass them through the legislative process. But taking proactive measures on this count goes far beyond 
Z-Corp's ethical and social responsibilities to the Gilbane community. 



42 CHAPTER 2. ETHICAL DECISION-MAKING 

• You are David. What values do you see involved in this situation? Design a solution that best preserves 
and integrates them. 

Partial List of Characters 

1. David Jackson: Young engineer whose measurements show that Z-Corp's emissions into the Gilbane 
water supply barely exceed local standards. He expresses concern to his supervisors on the impact on 
the safety and health of the local community. 

2. Diane Collins: David's supervisor who is under strong pressure to maintain the Z-Corp Gilbane 
plant's thin profit levels. She is concerned about environment responsibility but defines it as staying 
within the limits of the law as put forth by the Gilbane community. Gilbane sets for the law and 
Z-Corp is responsible for staying within its limits. If the law is inadequate, then Gilbane is responsible 
for changing it. 

3. Tom Richards: Environmental engineer hired to measure Z-Corp's heavy metal emissions into the 
Gilbane water supply. Richards warns David that he bears ultimate responsibility for Z-Corp's emisions 
into the Gilbane water supply. 

4. Phil Port: Z-Corp's official in charge of the company's compliance with environmental regulations. 
He calls David during the TV documentary to claim that it portrays him as an "environmental rapist." 

5. Frank Seeders: Frank is the point man on helping to gear up Z-Corp's operations to meet the 
new demand created by their recent venture with a Japanese company. He asks David to help him 
streamline Z-Corp's manufacturing process. 

6. Maria Renato: Local reporter who produces documentary exposing Z-Corp's potentially dangerous 
emissions. She has prepared her report based on documentation provided by David Jackson. 

Statement of Values List 

1. Justice / Fairness: Be impartial, objective and refrain from discrimination or preferential treatment 
in the administration of rules and policies and in its dealings with students, faculty, staff, administra- 
tion, and other stakeholders. 

2. Responsibility: Recognize and fulfill its obligations to its constituents by caring for their essential 
interests, by honoring its commitments, and by balancing and integrating conflicting interests. As 
responsible agents, the faculty, employees, and students of the college of business Administration are 
committed to the pursuit of excellence, devotion to the community's welfare, and professionalism. 

3. Respect: Acknowledge the inherent dignity present in its diverse constituents by recognizing and 
respecting their fundamental rights, these include rights to property, privacy, free exchange of ideas, 
academic freedom, due process, and meaningful participation in decision making and policy formation. 

4. Trust: Recognize that trust solidifies communities by creating an environment where each can ex- 
pect ethically justifiable behavior from all others. While trust is tolerant of and even thrives in an 
environment of diversity, it also must operate within the parameters set by established personal and 
community standards. 

5. Integrity: Promote integrity as characterized by sincerity, honesty, authenticity, and the pursuit of 
excellence. Integrity shall permeate and color all its decisions, actions and expressions. It is most 
clearly exhibited in intellectual and personal honesty in learning, teaching, mentoring and research. 

2,3.3 What you are going to do... 

1. Watch the video and make sure you understand the situation from David's point of view. At the end 
David makes his decision. You should be open to the possibility that there may be other decisions that 
can be taken in this situation that may be better from a moral point of view. 

2. What is David's problem? Try formulating it in terms of values that are under threat and conflicts 
between values. You may even want to identify information needs relevant to solving this problem? 



43 

3. What solutions do different individuals in the video recommend to David? How good are they in terms 
of realizing or protecting key moral values? Does David (and the video) pay sufficient attention to 
these different recommendations? Does he miss better value-integrative solutions? 

4. Make your decision. Defend it in terms of key moral values. Use the values provided above in the 
UPRM College of Business Administration's Statement of Values. 

5. Give special attention to the links provided in this module. Are there solutions to David's problem 
not mentioned in the video? 



2,3.4 Conclusion 

More and more, business ethics is concentrating on four general themes or issues. In this section, you will 
use the video, "Gilbane Gold," to reflect on these different themes. Consider this your first incursion into 
business ethics. Most important, remember that ethics forms a central part of everyday business practice 
and is essential to good business. 

Ethical Leadership: In terms of the values mentioned in the SOV, discuss and rate the following 
characters in terms of the leadership skills and qualities they exhibit: 

• Diane Collins 

• David Jackson 

• Phil Port 

• Tom Richards 

• Frank Seeders 

Social Responsibility: 

David reminds Diane that corporations like Z-Corp are responsible for the health and safety impacts of 
their operations. Diane disagrees placing more emphasis on following the law and serving the community 
by creating economic opportunity and jobs. Who sets for the better argument? Using these positions as a 
springboard, set forth your own conception of corporate social responsibility. 
Corporate Governance: 

Toward the end of the video, David goes to local reporter, Maria Renato, and provides her with inside 
information on his and Tom Richards's environmental and safety concerns. Was this a necessary action? 
Did David have other options which would have allowed him to work within Z-Corp for an effective response 
to his concerns? How do engineers advocate within for-profit corporations for including ethical values into 
corporate decisions? What do real world corporations do to recognize and respond to dissenting professional 
opinions held by their employees? 

Values in Gilbane Gold Handout 



This is an unsupported media type. To view, please see http://cnx.org/content/ml5783/latest/Values in 

Gilbane Gold Handout.doc 



Figure 2.3: This handout for students provides exercises based on Gilbane Gold that introduces the 
three AACSB business ethics themes: ethical leadership, ethical decision-making, and social responsibil- 
ity. 



44 CHAPTER 2. ETHICAL DECISION-MAKING 

Virtues for ADMI 3405 



This is an unsupported media type. To view, please see http://cnx.org/content/ml5783/latest/Virtues for 

ADMI 3405.pptx 

Figure 2.4: Clicking on this file are the virtues worked out in the previous module. Use these to carry 
out the values-based decision making exercise in Gilbane Gold. 



2.4 Socio- Technical Systems in Professional Decision Making 5 
2,4,1 Module Introduction 

Milagro Beanfield War 

Joe Mondragon has created quite a stir in Milagro, a small village in New Mexico. He has illegally diverted 
water from the irrigation ditch to his field to grow beans. Access to scarce water in New Mexico has created 
sharp political and social disputes which have reached a crises point in Milagro. Competing with traditional 
subsistence farmers like Joe is the profitable recreation industry. Ladd Devine, a wealthy developer, has joined 
with the state government in New Mexico to build a large recreational center consisting of a restaurant, travel 
lodge, individual cabins and a lavish golf course. Since there is not enough water to cover both recreational 
and agricultural uses and since Ladd Devine's project promises large tax revenues and new jobs, the state 
government has fallen behind him and has promised to give to the recreational facilities all the water it 
needs. Hence, the problem created by Mondragon's illegal act. You work for Ladd Devine. He has asked 
you to look into local opposition to the recreational facility. Along these lines, you attend the town meeting 
scheduled by Ruby Archuleta in the town's church. You are concerned about Charlie Bloom's presentation 
and the impact it may have on the local community. Prepare a STS analysis to test Bloom's assertions and 
better prepare Ladd Devine for local opposition to his facility. 
Incident at Morales 

Fred is a chemical engineer hired by Phaust Corporation to design and make operational a new chemical plant 
for the manufacture of their newly redesigned paint thinner. Under financial pressure from the parent French 
company, Chemistre, they have decided to locate their new plant in Morales, Mexico to take advantage of 
lower costs and more flexible government regulations. You are well on the way toward designing this new 
plant when news comes from Chemistre that all budgets are being cut 20% to finance Chemistre's latest 
takeover acquisition. You are Fred and are now faced with a series of difficult financial-engineering decisions. 
Should you hold out for the more expensive Lutz and Lutz controls or use the cheaper ones produced 
locally? Should you continue with the current plant size or cut plant size and capacity to keep within 
budgetary constraints? You have also been made aware of the environmental and health risks associated 
with not lining the waste ponds used by the plant. Do you advocate lining the ponds or not, the latter being 
within compliance for Mexican environmental and health regulations. Prepare a STS analysis to help you 
make and justify these decisions. Make a series of recommendations to your supervisors based on this study. 

Puerto Rican Projects 

• Your company, Cogentrix, proposes a cogeneration plant that uses coal, produces electricity, and creates 
steam as a by-product of electricity generation process. Because the steam can be sold to nearby tuna 
canning plants, your company wishes to study the feasibility of locating its plant in or near Mayaguez, 
Puerto Rico. (Co-generation technology has become very popular and useful in some places.) Carry 



5 This content is available online at <http://cnx.Org/content/ml4025/l.9/>. 



45 

out a STS analysis to identify potential problems. Make a recommendation to your company. If your 
recommendation is positive, discuss how the plant should be modified to fit into the Mayaguez, Puerto 
Rico STS. 

• Your company, Southern Gold Resources, is interested in mining different regions in central Puerto 
Rico for copper and gold. But you know that twenty years earlier, two proposals by two international 
mining companies were turned down by the PR government. Carry out a STS study to examine the 
feasibility of designing a different project that may be more acceptable to local groups. What does your 
STS analysis tell you about social and ethical impacts, financial promise, and likely local opposition. 
Can profitable mining operations be developed that respect the concerns of opposed groups? What is 
your recommendation based on your STS analysis? 

• Windmar, a company that manufactures and operates windmills for electricity generation has proposed 
to locate a windmill farm in a location adjacent to the Bosque Seco de Guanica. They have encountered 
considerable local opposition. Carry out a STS analysis to understand and clarify this opposition. Can 
the concerns of local stakeholders be addressed and the windmill farm still remain profitable? How 
should the windmill project be modified to improve its chances of implementation? 

2.4.2 Things to Know about STSs 

What is a Socio- Technical System? (STS) 

A socio-technical system (=STS) is a tool to help a business anticipate and successfully resolve interdisci- 
plinary business problems. "Interdisciplinary business problems" refer to problems where financial values 
are intertwined with technical, ethical, social, political, and cultural values. (Reference: Chuck Huff, Good 
Computing: A Virtue Approach to Computer Ethics, draft manuscript for Jones and Bartlett Publishers) 

Four Things to Know About STSs 

1. Socio- Technical Systems are first and foremost systems: their components are interrelated 
and interact so that a change in one component often produces changes in the other 
components and in the system as a whole. Bringing about good changes and preventing bad 
ones requires adjusting the different elements in relation to one another to maintain or strengthen key 
values embedded in the system. 

2. STS have different components which interact with one another. Some of these are described 
just below. They include business projects/processes, physical surroundings, stakeholders, procedures, 
laws and regulations, financial and market systems, information systems, and environmental systems. 
The first part of a STS analysis is to identify these components and further describe them so as to 
include what makes each system special and unique. 

3. Socio- Technical systems embody values which can be located in the system's components 
and throughout the system as a whole, (a) These values may be vulnerable, under attack, or at 
risk. For example, the way a company stores employee data makes make it vulnerable to unauthorized 
access. This would endanger the value of privacy, (b) These values may come into conflict with one 
another so that resolving these conflicts may require adjusting the entire system, (c) The system and 
its components may change in such a way as to produce significant risks or harms. 

4. STSs change, and this change displays a trajectory or path. Frequently this trajectory is brought 
about by the power exercised by entrenched interests. Ladd Devine, as a wealthy business person, is 
able to exercise considerable over state policies regarding the distribution of water. His exercise of this 
power sets the community of Milagro on a trajectory of change away from agriculture and more toward 
the recreation industry. 

2.4.3 Constituents 

1. Technology including hardware, software, designs, prototypes, products, or services. Examples of 
engineering projects in Puerto Rico are provided in the PR STS grid. In the Therac-25 case, the 



46 CHAPTER 2. ETHICAL DECISION-MAKING 

hardware is the double pass accelerator, in Hughes the analogue-to-digital integrated circuits, and in 
Machado the UNIX software system and the computers in the UCI laboratories that are configured by 
this system. Because technologies are structured to carry out the intentions of their designers, they 
embed values. 

2. Physical Surroundings. Physical surroundings can also embed values. Doors, by their weight, 
strength, material, size, and attachments (such as locks) can promote values such as security. Physical 
surroundings promote, maintain, or diminish other values in that they can permit or deny access, 
facilitate or hinder speech, promote privacy or transparency, isolate or disseminate property, and 
promote equality or privilege. 

3. People, Groups, and Roles. This component of a STS has been the focus of traditional stakeholder 
analyses. A stakeholder is any group or individual which has an essential or vital interest in the 
situation at hand. Any decision made or design implemented can enhance, maintain, or diminish this 
interest or stake. So if we consider Frank Saia a decision-maker in the Hughes case, then the Hughes 
corporation, the U.S. Air Force, the Hughes sub-group that runs environmental tests on integrated 
circuits, and Hughes customers would all be considered stakeholders. 

4. Procedures. How does a company deal with dissenting professional opinions manifested by employees? 
What kind of due process procedures are in place in your university for contesting what you consider to 
be unfair grades? How do researchers go about getting the informed consent of those who will be the 
subjects of their experiments? Procedures set forth ends which embody values and legitimize means 
which also embody values. 

5. Laws, statutes, and regulations all form essential parts of STSs. This would include engineering 
codes as well as the state or professional organizations charged with developing and enforcing them 

6. The final category can be formulated in a variety of ways depending on the specific context. Computing 
systems gather, store, and disseminate information. Hence, this could be labeled data and data 
storage structure. (Consider using data mining software to collect information and encrypted and 
isolated files for storing it securely.) In engineering, this might include the information generated as 
a device is implemented, operates, and is decommissioned. This information, if fed back into refining 
the technology or improving the design of next generation prototypes, could lead to uncovering and 
preventing potential accidents. Electrical engineers have elected to rename this category, in the context 
of power systems, rates and rate structures. 



2.4.4 

Ethics of STS Research 

• Right of Free and Informed Consent: This is the right of participants in a research project to 
know the harms and benefits of the research. It also includes the right not to be forced to participate 
in a project but, instead, offer or withdraw voluntarily their consent to participate. When preparing 
a STS analysis, it is mandatory to take active measures to facilitate participants's free and informed 
consent. 

• Any STS analysis must take active measures to recognize potential harms and minimize or eliminate 
them. This is especially the case regarding the information that may be collected about different 
individuals. Special provisions must be taken to maintain confidentiality in collecting, storing, and 
using sensitive information. This includes careful disposal of information after it is no longer needed. 



2.4.5 Participatory Observation 



• 



As we said above, a socio-technical system (STS) is "an intellectual tool to help us recognize patterns 
in the way technology is used and produced." Constructing these tools requires combining modes of 
analysis that are ordinarily kept separate. Because STSs embed values, they are normative. These 
values can help to chart out trajectories of change and development because they outline values that 



47 

the system needs to realize, maintain, or even enhance. In this way, the study of STSs is normative and 
a legitimate inquiry for practical and professional ethics. On the other hand, STS analysis requires 
finding out what is already there and describing it. So STS analysis is descriptive as well. In this 
textbox, we will talk briefly about the descriptive or empirical components of STS analysis. This 
material is taken from the draft manuscript of Good Computing: A Virtue Approach to Computer 
Ethics and has been developed by Chuck Huff. 

Interviews: Semi-Structured and Structured Interviews conducted with those familiar with a given 
STS provide an excellent source of information on the constituents of a given STS and how these fit 
together into an interrelated whole. For example, the STS grid on power systems was put together 
by experts in this area who were able to provide detailed information on power rates and protocols, 
software used to distribute energy through the gridlines, and different sources (representing both hard 
and soft technologies) of power generation. 

Field Observation: Those constructing a STS analysis go directly to the system and describe it in 
its day-to-day operation. Two books provide more information on the types and techniques of field 
observation: 1. David M. Fetterman, Ethnography: 2nd Edition, Applied Social Research Methods 
Series, Vol 17. London, UK.: Sage Publishers, 1998 and 2. James P. Spradley, Participant Observation. 
New York, Harcourt, 1980. The data collected in this method can also be used to construct day-in- 
the-life scenarios that describe how a given technology functions on a typical day. These scenarios 
are useful for uncovering value conflicts and latent accidents. See James T. Reason, Human Error, 
Cambridge, UK.: Cambridge University Press, 1990 for information on latent accidents, how they are 
detected, and how they are prevented. 

Questionnaires: Questionnaires are useful for gathering general information from large numbers of 
people about a STS. Constructing good questionnaires is a difficult process that requires patience as 
well as trial and error. (Trying out questions on classmates and friends is the best way to identify 
unclear or misleading questions.) Avoiding complex, overly leading, and loaded questions represent a 
few of the challenges facing those who would construct useful questionnaires. 

Archival and physical trace methods: Looking at user manuals provides insight into how a system 
has been designed and how it works. Studying which keys are worn down on computer keyboards 
provides information on the kind of work being done. Comparing how a system is intended to work 
with how it is in fact being used is also illuminating, especially when one is interested in tracing the 
trajectory of a STS. Working with archival and physical trace methods requires critical thought and 
detective work. 

None of the above methods, taken in isolation, provides complete information on a STS. Triangulation 
represents the best way to verify data and to reconcile conflicting data. Here we generate evidence and 
data from a variety of sources then compare and collate. Claims made by interviewees that match direct 
on-site observations confirm one another and indicate data strength and veracity. Evidence collected 
through questionnaires that conflicts with evidence gathered through archival research highlights the 
need for detective work that involves further observation, comparison, interpretation, and criticism. 
Developing STS analyses bears a striking resemblance to requirements analysis. In both cases, data 
is collected, refined, and put together to provide an analysis. A key to success in both is the proper 
combination of normative and descriptive procedures. 



2,4,6 Exercise 1: Make a Table that Describes the Socio- Technical System 

Directions: Identify the constituents of the Socio- Technical System. Use the broad categories 
to prompt you. 



1. What are the major hardware and software components? 

2. Describe the physical surroundings. 

3. What are the major people groups or roles involved? 

4. Describe any procedures in the STS. 



48 



CHAPTER 2. ETHICAL DECISION-MAKING 



5. Itemize the laws, statutes, and regulations. 

6. Describe the data and data structures in your STS. Use the two templates below that fill in this table 
for energy generation systems and for engineering ethics in Puerto Rico. 

Socio Technical System Table 





Hard- 
ware 


Software 


Physical 
Sur- 
round- 
ings 


People, 

Groups, 

Roles 


Procedure 


3 Laws 


Data 
and Data 

Struc- 
tures 



















































Table 2.8 



2,4,7 Exercise 2: Identify Value Mismatches in the STS 

Directions: identify the values embedded in the STS. Use the table below to suggest possible 
values as well as the locations in which they are embedded. 

1. Integrity: "Integrity refers to the attributes exhibited by those who have incorporated moral values 
into the core of their identities. Such integration is evident through the way values denoting moral ex- 
cellence permeate and color their expressions, actions, and decisions. Characteristics include wholeness, 
stability, sincerity, honesty to self and others, suthenticity, and striving for excellence. 

2. Justice: Justice as fairness focuses on giving each individual what is his or her due. Three senses of jus- 
tice are (1) the proper, fair, and proportionate use of sanctions, punishments and disciplinary measures 
to enforce ethical standards (retributive justice), (2) the objective, dispassionate, and impartial distri- 
bution of the benefits and burdens associated with a system of social cooperation (distributive justice), 
(3) an objectively determined and fairly administered compensation for harms and injustices suffered 
by individuals (compensatory justice), and (4) a fair and impartial formulation and administration of 
rules within a given group. 

3. Respect: Respecting persons lies essentially in recognizing their capacity to make and execute decisions 
as well as to set forth their own ends and goals and integrate them into life plans and identities. Respects 
underlies rights essential to autonomy such as property, privacy, due process, free speech, and free and 
informed consent. 

4. Responsibility: (Moral) Responsibility lies in the ability to identify the morally salient features of a 
situation and then develop actions and attitudes that answer to these features by bringing into play 
moral and professional values. Responsibility includes several senses: (1) individuals are responsible in 
that they can be called upon to answer for what they do; (2) individuals have responsibilities because 
of commitments they make to carrying out the tasks associated with social and professional roles; (3) 
responsibility also refers to the way in which one carries out one's obligations (This can range from 
indifference to others that leads to minimal effort to high care for others and commitment to excellence) 

5. Free Speech: Free Speech is not an unlimited right. Perhaps the best place to start is Mill's argument 
in On Liberty. Completely true, partially true, and even false speech cannot be censored, the latter 
because censoring false speech deprives the truth of the opportunity to clarify and invigorate itself by 
defending itself. Mill only allows for a limitation of free speech based on harm to those at which the 
speech is directed. Speech that harms an individual (defamatory speech or shouting "fire" in a crowded 
theatre) can be censored out of a consideration of self-defense, not of the speaker, but of those who 
stand to be harmed by the speech. 



49 

6. Privacy: If an item of information is irrelevant to the relation between the person who has the infor- 
mation and the person sho seeks it, then that information is private. Privacy is necessary to autonomy 
because control over information about oneself helps one to structure and shape one's relations with 
others. 

7. Property: According to Locke, we own as property that with which we have mixed our labor. Thomas 
Jefferson argues that ideas are problematic as property because, by their very nature, they are shared 
once they are expressed. They are also nonrivalrous and nonexclusive. 

Drawing Problems from Embedded Values 

• Changes in a STS (e.g., the integration of a new technology) produce value mismatches as the values 
in the new component conflict with those already existing within the STS. Giving laptops to children 
produces a conflict between children's safety requirements and the safety features embedded in laptops 
as designed for adults. 

• Changes within a STS can exaggerate existing value conflicts. Using digitalized textbooks on laptop 
computers magnifies the existing conflict concerning intellectual property; the balance between copy- 
rights and educational dissemination is disrupted by the ease of copying and distributing digitalized 
media. 

• Changes in STS can also lead to long term harms. Giving laptops to children threatens environmental 
harm as the laptops become obsolete and need to be safely disposed of. 

Values Embedded in STS 





Hard- 
ware 


Software 


Physical 
Sur- 
round- 
ings 


People, 

Groups, 

Roles 


Procedure 


3 Laws 


Data 

and Data 
Struc- 
tures 


Integrity 
















Justice 
















Respect 
















Responsib 

for 

Safety 


lity 














Free 
Speech 
















Privacy 
















Intellectua 
Property 


1 















Table 2.9 



2.4.8 Using Socio- Technical System Grids for Problem Specification 

The activity of framing is a central component of moral imagination. Framing a situation structures its 
elements into a meaningful whole. This activity of structuring suggests both problems and solutions. Framing 
a situation in different ways offers alternative problem specifications and solution possibilities. Since skillful 
framing requires practice, this part of the module suggests how socio-technical system tables can help provide 
different frames for problem specification and solution generation. 

Different Problem Frames 



50 CHAPTER 2. ETHICAL DECISION-MAKING 

• Technical Frame: Engineers frame problems technically, that is, they specify a problem as raising a 
technical issue and requiring a technical design for its resolution. For example, in the STS grid appended 
below, the Burger Man corporation wishes to make its food preparation areas more safe. Framing this 
technically, it would be necessary to change the designs of ovens so they are more accident-proof. 

• Physical Frame: How can the Burger Man corporation redesign its restaurants as physical facilities 
to make them more accessible? One way is to change the access points by, say, designing ramps to 
make restaurants wheel chair accessible. Framing this as a physical problem suggests solutions based 
on changing the physical structure and arrangement of the Burger Man STS. 

• Social Frame: Burger Man as a corporation has stakeholders, that is, groups or individuals who have 
an essential interest at play in relation to the corporation. For example, framing the problem of making 
Burger Man more safe as a social problem might suggest the solution of integrating workplace safety 
into worker training programs and conducting regular safety audits to identify embedded risks. 

• Financial or Market-Based Frames: Burger Man is a for-profit corporation which implies that 
it has certain financial responsibilities. Consequently, Burger Man should be concerned with how to 
provide safe, child-proof chairs and tables that do not cut unduly into corporate profits. But like the 
legal perspective, it is necessary to conduct ethical and social framing activities to compensate for the 
one-sidedness of financial framing. 

• Managerial Frame: Many times ethical problems can be framed as managerial problems where the 
solution lies in changing managerial structures, reporting relations, and operating procedures. For 
example, Burger Man may develop a specific procedure when a cashier finishes a shift and turns over 
the cash register and its contents to another cashier. Burger Man may develop cleaning procedures 
and routines to minimize the possibility of serving contaminated or spoiled food to customers. 

• Legal Frame: Burger Man may choose to frame its environmental responsibilities into developing 
effective procedures for complying with OSHAA and EPA regulations. Framing a problem legally 
certainly helps to identify effective and necessary courses of action. But, because the ethical and social 
cannot be reduced to the legal, it is necessary to apply other frames to uncover additional risks not 
suggested by the legal framing. 

• Environmental Framing: Finally, how does Burger Man look from the environmental standpoint? 
Does it consider environmental value (environmental health, safety, and integrity) as merely a side 
constraint to be addressed only insofar as it interferes with realizing supposedly more important values 
such as financial values? Is it a value to be traded off with other values? (For example, Burger Man 
may destroy the local environment by cutting down trees to make room for its latest restaurant but 
it offsets this destruction through its program of planting new trees in Puerto Rican tropical rain 
forests.) Framing a problem as an environmental problem puts the environment first and sets as a goal 
the integration of environmental values with other values such as worker safety and corporate profits. 

Burger Man Socio- Technical System Table 

This media object is a downloadable file. Please view or download it at 
< Socio Technical System Grid for Business Ethics. docx> 

Figure 2.5: Clicking on this figure will open as a Word file a STS table based on the fictional corporation, 
Burger Man. Below are a list of problems suggested by the STS analysis. 



2.4.9 Media File Uplinks 

This module consists of two attached Media Files. The first file provides background information on STSs. 
The second file provides two sample STS grids or tables. These grids will help you to develop specific STSs 



51 

to analyze cases in engineering, business, and computer ethics without having to construct a completely new 
STS for each case. Instead, using the two tables as templates, you will be able to zero in on the STS that 
is unique to the situation posed by the case. This module also presents background constraints to problem- 
solving in engineering, business, and computer ethics. These constraints do not differ absolutely from the 
constituents of STSs. However, they pose underlying constraints that outline the feasibility of an ethical 
decision and help us to identify obstacles that may arise when we attempt to implement ethical decisions. 

Socio- Technical Systems 

This media object is a downloadable file. Please view or download it at 
<STS_Background_V3.doc> 

Figure 2.6: Socio- Technical Systems: Constituents, Values, Problems, and Constraints. 



STS Templates 

This media object is a downloadable file. Please view or download it at 
<STS_Templates.doc> 

Figure 2.7: Two STSs, Power Engineering and the Puerto Rican Context of Engineering Practice. 



References 

1. Brincat, Cynthia A. and Wike, Victoria S. (2000) Morality and the Professional Life: Values at Work. 
Upper Saddle River, NJ: Prentice Hall. 

2. Huff, Chuck and Jawer, Bruce, "Toward a Design Ethics for Computing Professionals in Social Issues 
in Computing: Putting Computing in its Place, Huff, Chuck and Finholt, Thomas Eds. (1994) 
New York: McGraw-Hill, Inc. 

3. Solomon, Robert C. (1999) A Better Way to Think About Business: How Personal INtgrity Leads to 
Corporate Success. Oxford, UK: Oxford University Press. 

4. Wike, Victoria S. (2001) "Professional Engineering Ethics Bahavior: A Values-based Approach," Pro- 
ceedings of the 2001 American Society for Engineering Education Annual Conference and 
Exposition, Session 2461. 

Bibliographical Information on Power STS 

1. Acceptable Evidence: Science and Values in Risk Management, edited by Deborah G. Mayo and 
Rachelle D. Hollander. London, UK: Oxford University Press, 1991. 

2. K. S. Shrader-Frechette. "Ethics and Energy" in Earthbound: New Introductory Essays in Environ- 
mental Ethics, 1st Edition, edited by Tom Regan. NY, NY: Random House, 1984. 

3. Nancy G. Leveson. Safeware: System Safety and Computers. NY, NY: Addison- Wesley Publishing 
Company, 1995. 

4. Charles Perrow. Normal Accidents: Living with High Risk Technologies. North America, Basic Books, 
1984. 



52 CHAPTER 2. ETHICAL DECISION-MAKING 

5. Malcolm Glad well. "Blowup" in The New Yorker, January 22, 1996: 32-36. 

6. James Reason. Human Error. Cambridge, UK: Cambridge University Press. 1990. 

7. Mark Sagoff. The Economy of the Earth: Philosophy, Law, and the Environment. Cambridge, UK: 
Cambridge University Press, 1988. 



Chapter 3 

CSR (Corporate Social Responsibility) 

3.1 A Short History of the Corporation 1 

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3.1.1 Introduction 

In this module you will learn about the history of corporations. Antecedants of the modern corporation 
can be found in the Middle Ages, the Renaissance, and in the Industrial Revolution in Great Britain and 
the United States. Corporations have evolved into their present form as the synthesis of discrete solutions 
to specific historical problems that have arisen in the practice of business. This module has been designed 
for courses in (1) business, society, and government, (2) business ethics, (3) corporate governance, and (4) 
corporate social responsibility. 

3.1.2 What you need to know . . . 

3.1.2.1 The History of the Corporation 

This historical process has produced five functions that characterize the modern corporation. 
Corporations have emerged as... 



1 This content is available online at <http://cnx.Org/content/ml7314/l.l/>. 



53 



54 CHAPTER 3. CSR (CORPORATE SOCIAL RESPONSIBILITY) 

1. "Passive devices" that hold property 

2. Structures designed to exert monopoly control over and regulate a domain of specialized knowledge 
and skill 

3. Means designed to pool capital and resources including human resources 

4. A legal shield that protects owners and investors from liability and helps to spread and distribute 
financial, moral, and legal risk 

5. Organizational decision-making structures that subordinate and synthesize the actions of human agents 
to bring about collective goals such as building a railroad, designing and manufacturing automobiles, 
and pursuing legitimate business ventures. 

3.1.2.1.1 Passive Devices that hold property 

When the abbot of a medieval monastery died, public officials had difficulty determining to whom its property, 
wealth, and resources passed. While this is hard to conceptualize from a modern standpoint, during the 
Middle Ages, no legal distinction could be made between (1) managing property owned by others, (2) 
exercising stewardship over property owned by others, and (3) owning property. Moreover, the concept and 
practice of owning property is complex. "Property" in its modern sense has been spelled out as a bundle 
of distinct rights including "the right to possess, control, use, benefit from, dispose of and exclude others 
from the property." (DesJardins: 37) These distinct rights are not given as entailments of a natural concept 
of property but represent legally endowed capacities designed to respond to specific practical problems. So, 
to return to the problem created by the death of the abbot, a legal entity (called the church) was created 
and endowed with the one of the bundled rights accompanying the notion of property, namely, the right to 
possess and hold property (Stone 1974: 11) 

3.1.2.1.2 Structures that exert monopoly control and regulate a domain of specialized 

Those familiar with European history know that the university came from student guilds. Students banded 
together to hire noted scholars willing to teach their research. Other guilds were formed around practical 
occupations as butchering or shoe making. Eventually, guilds evolved to address a series of practical problems: 
(1) how to educate individuals concerning the skills and knowledge required by the practice, (2) how to 
identify those responsible for the improper practice of the craft, (3) how to control who could and could 
not participate in (and profit from) the craft, and (4) how to regulate the craft to promote the interests of 
its practitioners and its beneficiaries or clients. Guilds became responsible for controlling the privileges of 
a trade, establishing rules and standards of practice, and holding courts to adjudicate grievances between 
participants. (Stone: 11-13) 

3.1.2.1.3 A set of means specially designed to pool capital and resources including human 
resources. 

As business ventures became more ambitious, their successful execution required raising considerable funds 
and capital along with the coordination of the activities of diverse human agents. Organizational structures 
were created slowly over time to raise money, acquire capital, and manage these complex ventures. This 
included creating roles that were coordinated through complex organizational systems. The distinction 
between the owner and manager functions, so crucial to the structure of the modern corporation, emerged 
slowly during this period. Owners provided money and capital and determined the overall goals pursued 
by the organization. Managers carried out administrative tasks concerned with day to day operations; their 
moral and legal duty was to remain faithful to the aims and interests of the owners. Unchartered joint stock 
companies served as proto-corporations that generated capital, protected monopolies of trade and craft, and 
managed complex ventures such as importing spices and tea from the Orient. As these structures evolved, 
they increasingly embodied the important distinction between the ownership and management functions. 



55 

3.1.2.1.4 Providing a legal shield to limit owner and operator liability 

Scandals in 18th century Great Britain revealed another set of problems besetting the emerging corporation. 
When the unchartered joint stock company, the South Sea Company, went bankrupt, all the investors 
and owners found themselves responsible for covering the huge debt created when risky investments and 
questionable ventures went sour. This debt went well beyond resources of the investors destroying their 
personal fortunes and placing many of them in debtor's prison. (This and other fiascoes were dramatized by 
Charles Dickens in his novel, Little Dorrit.) The specter of unlimited liability scared off potential investors 
and set back the development of the corporation. It became necessary to endow joint stock companies with 
powers and devices that limited and distributed financial, moral, and legal risk. (Both owners and managers 
required protection although in different ways.) Individuals would invest in joint stock companies only when 
the associated risks became manageable and widely distributed. 

3.1.2.1.5 Organizational structure that subordinate and synthesize the actions of human agents 

Negatively, the development of the modern corporation was facilitated by creating a shield that limited the 
liability of owners and managers. Liability for owners was limited legally to the amount invested. Liability 
for managers required proving that they failed to remain faithful to the interests of the stockholders, the 
principals or originators of their actions. This broke down into demonstrating failure to exercise "sound 
business judgment" by, among other things, allowing outside, competing interests to corrupt their business 
judgment. Positively, the corporation emerged out of a series of legal innovations designed to establish and 
then control the collective power of corporate organizations. Complex organizational structures were created 
that designed differentiated roles filled by employees. These structures served to channel the activities of 
employees toward corporate ends. The investor role stabilized into that of stockholders who owned or held 
shares of the corporation. To promote their interests and to establish the cardinal or fundamental objectives 
of the corporation, the stockholders elected representatives to serve on a board of directors. The directors 
then appointed managers responsible for running the corporation and realizing the interests and objectives of 
the stockholders. Managers, in turn, hired and supervised employees who executed the company's day to day 
operations (line employees) and provided expert advice (staff employees). These roles (and the individuals 
who occupied them) were related to one another through complex decision-making hierarchies. Davis (1999) 
in his discussion of the Hitachi Report shows how many modern companies have dropped or deemphasized 
the staff-line distinction. Others (Stone, Nader) cite instances where managers have become so powerful that 
they have supplanted the directorial role. (They hand pick the directors and carefully filter the information 
made available to stockholders.) But these two distinctions (staff v. line and owner v. operator) remain 
essential for understanding and classifying modern corporations. (See Fisse, Stone, and Nader.) 

3.1.2.1.6 Profile of the Modern Corporation 

Corporations became full blown legal persons. They acquired legal standing (can sue and be sued), have 
been endowed with legal rights (due process, equal protection, and free speech), and have acquired legal 
duties (such as tax liabilities). (See table below for the common law decisions through which these corporate 
powers and rights have been established.) The powers of the corporation were regulated by the state through 
founding charters which served roughly the same function for a corporation as a constitution did for a state. 
Initially, charters limited corporate powers to specific economic activities. Railroad companies, for example, 
had charters that restricted their legitimate operations to building and operating railroads. When they 
sought to expand their operations to other activities they had to relate these to the powers authorized in 
the founding charter. If a charter did not specifically allow an operation or function, then it was literally 
ultra vires, i.e., beyond the power of the corporation (Stone: 21-22). This method of control gradually 
disappeared as states, competing to attract business concerns to incorporate within their boarders, began to 
loosen charter restrictions and broaden legitimate corporate powers in a process called "charter mongering." 
Eventually charters defined the legitimate powers of corporations so broadly that they ceased to be effective 
regulatory vehicles. 



56 



CHAPTER 3. CSR (CORPORATE SOCIAL RESPONSIBILITY) 



Given this vacuum, governments have had to resort to other measures to control and direct corporations 
toward the public good. The practice of punishment, effective in controlling human behavior, was extended 
to corporations. But Baron Thurlow (a British legal theorist) framed the central dilemma in corporate 
punishment with his oft quoted comment that corporations cannot be punished because they have "no soul 
to damn" and "no body to kick." The unique attributes of corporations has given rise to creative options for 
corporate control and punishment: fining, stock dilution, court-mandated changes in corporate structure, 
adverse publicity orders, and community service. (See Fisse) Most recently, Federal Sentencing Guidelines 
have sought to provide incentives for corporations to take preventive measures to avoid wrongdoing by 
developing ethics compliance programs. These guidelines adjust punishments in light of ethics programs 
that the corporations have designed and implemented to prevent wrongdoing. Corporations found guilty of 
wrongdoing would still be punished. But punishments can be reduced when guilty corporations show that 
they have developed and implemented compliance programs to promote organizational ethics and to prevent 
corporate wroingdoing. These include compliance codes, ethics training programs, ethics risk identification 
measures, and corporate ethical audits. 



History of Corporation 



Problem 


Solution 


Organizational Form 


Successfully transferring stew- 
ardship over church holdings to 
new abbot 


Create a "passive device to hold 
property" 


Proto-corporation 


Control over and regulation of a 
practice or skill 


Create a device to (a) hold 
the privileges of some partic- 
ular trade, (b) establish rules 
and regulations for commerce, 
and (c) hold courts to adjudicate 
grievances among members. 


Medieval guilds that evolve into 
regulated companies. 


Pooling capital and resources and 
directing complex ventures 


Create a device (a) to hold provi- 
leges of trade, (b) where investors 
provide capital, and (c) that del- 
egates operations to managers 


Unchartered joint stock compa- 
nies 


Limiting investor liability, limit- 
ing manager liability, and balanc- 
ing the two 


Corporation evolves into a legal 
person with (a) legal rights and 
duties, (b) owned by sharehold- 
ers, (c) run by managers, (d) reg- 
ulated through state charter 


Limited corporation whose oper- 
ations are defined in and limited 
by the charter 


continued on next page 



57 



Ultra Vires (charter prevents 
growth) and Charter Mongering 



Granted broad powers through 
more broadly defined charters 



Full Blown Corporation 



Finding agent 
wrongdoing 



responsible for 



(a) Due process, equal protec- 
tion, and free speech rights, (b) 
legal duties, (c) legal standing, 
(d) Federal Sentencing Guide- 
lines, and Sarbanes-Oxley Act 



Corporation as Legal Person 



Table 3.1: Modified from Christopher Stone, Where the Law Ends 
Options for Corporate Punishment (Fisse and French) 





Descriptio 


i Example 


Target of 
Punish- 
ment 


Deterrenc* 

Trap 

Avoided? 


; Non- 
financial 
Values 


Responsivt 
Adjust- 
ment 


i Interference 
with 
Cor- 












Ad- 
dressed? 




porate 

Black 

Box 




Monetary 


Fines 


Pentagon 


Harms in- 


Fails to 


Few or 


None 


No inter- 




Exaction 




Procure- 
ment 
Scandals 


nocent 


Escape 


None 
Targeted 




ference 




Stock Di- 
lution 


Dilute 
Stock and 
award to 
victim 




Stockholder 
(Not nec- 
essarily 
guilty) 


i Escapes 
by attack- 
ing future 
earnings 


Few or 
None 


Limited 


No inter- 
ference 




Probation 


Court 


SEC Vol- 


Corporation 


Escapes 


Focuses on 


Passive 


Substantial 






orders 
internal 


untary 
Disclosure 


and its 
Members 


since it 
mandates 


manage- 
ment and 


adjust- 
ment since 


entry into 
and in- 






changes 
(special 


Program 




organi- 
zational 


subgroup 
values 


imposed 
from 


terference 
with cor- 






board 
appoint- 
ments) 






changes 




outside 


porate 
black box 










cm 


itinued on nex 


t page 







58 



CHAPTER 3. CSR (CORPORATE SOCIAL RESPONSIBILITY) 



Court 


Court 


English 


Targets 


Escapes 


Loss of 


Active ad- 


No direct 


Ordered 


orders 


Bread 


corporate 


(although 


prestige / 


justment 


inter- 


Adverse 


corpora- 


Acts (Hes- 


image 


adverse 


Corporate 


triggered 


ference 


Publicity 


tion to 


ter Prynne 




publicity 


shame / 


by shame 


(corpo- 




publicize 


shame in 




indirectly 


Loss of 




ration 




crime 


Scarlet 
Letter) 




attacks 

financial 

values) 


Face/Honor 




motived 
to restore 
itself) 


Communit 


yCorporation 


Allied 


Representat 


.vEscapes 


Adds 


Passive 


None 


Service 


performs 


chemical 


groups/indi 


ddniffife 


value to 


or no ad- 




Orders 


services 


(James 


from cor- 


targets 


commu- 


justment: 






mandated 


River 


poration 


non- 


nity 


sometimes 






by court 


Pollution) 




financial 
values 




public 
does rec- 
ognize 
that cs is 
punish- 
ment 





Table 3.2 

Requirements of Sarbanes-Oxley (Summarized by Dyrud: 37) 

• Provide increased protection for whistle-blowers 

• Adhere to an established code of ethics or explain reasons for non-compliance 

• Engage in "full, fair, timely and understandable disclosure" 

• Maintain "honest and ethical" behavior. 

• Report ethics violations promptly 

• Comply with "applicable governmental laws, rules, and regulations" 

• Dyurd cites: ELT, Ethics and Code of Conduct, n.d.; http://www.elt-inc.com/solution/ethics 
_and_code_of_conduct_training_obligations.html 

Amended Federal Sentencing Guidelines (Taken from Dyrud: 37) 

1. Establishing standards and procedures to prevent and detect criminal conduct 

2. Promoting responsibility at all levels of the program, together with adequate program resources and 
authority for its managers 

3. Exercising due diligence in hiring and assigning personnel to positions with substantial authority 

4. Communicating standards and procedures, including a specific requirement for training at all levels 

5. Monitoring, auditing, and non-internal guidance/reporting systems 

6. Promiting and enforcing of compliance and ethical conduct 

7. Taking reasonable steps to respond appropriately and prevent further misconduct in detecting a vio- 
lation 



3.1.2.2 Legal Trail Toward Corporate Moral Personhood: A Table Summary 



59 



Date 


Decision 


Legal Right Affirmed 


1889 


Minneapolis and St. L. R. Co. v. 
Beckwith 


Right for judicial review on state 
legislation 


1893 


Noble v. Union River Logging R. 
Col, 


Right for judicial review for 
rights infringement by federal leg- 
islation 


1906 


Hale v. Henkel 


Protection "against unreasonable 
searches and seizures (4th) 


1908 


Armour Packing C. v. United 
States 


Right to trial by jury (6th) 


1922 


Pennsylvania Coal Co. V. Mahon 


Right to compensation for gov- 
ernment takings 


1962 


Fong Foo v. United States 


Right to freedom from double 
jeopardy (5th) 


1970 


Ross v. Bernhard 


Right to trial by jury in civil case 
(7th) 


1976 


Virginia Pharmacy Board v. Vir- 
ginia Consumer Council) 


Right to free speech for purely 
commercial speech (1st) 


1978 


First National Bank of Boston v. 
Bellotti 


Right to corporate political 
speech (1st) 


1986 


Pacific Gas and Electric Com- 
pany v. Public Utility Commn 
of California 


Right against coerced speech 

(1st) 



Table 3.3: From Ritz, Dean. (2007) "Can Corporate Personhood Be Socially Responsible?" in eds. May, 
S., Cheney, G., and Roper, J., Oxford, UK: Oxford University Press: 194-195. 



3.1.2.3 

3.1.3 What you will do ... 

3.1.3.1 Exercise One: Other People's Money 

Watch the shareholder's meeting in the movie, " Other People's Money." Then answer the 
questions below. Think generally about what the manager of a corporation should do with 
the money its stakeholders have invested in it. 

• What is Larry the Liquidator's basic argument? What is Andrew Jorgensen's basic argument? 

• What is Larry the Liquidator's conception of the nature and value of the corporation? What is Andrew 
Jorgensen's conception of the nature and value of the corporation? 

• What is the social responsibility of a corporation according to Larry the Liquidator? What is it 
according to Andrew Jorgensen? 

• Write a paragraph on which argument you find most persuasive, that of Larry or that of Andrew. 
Explain why you find it persuasive. 



60 CHAPTER 3. CSR (CORPORATE SOCIAL RESPONSIBILITY) 

3.1.3.2 Exercise Two: How to punish Arthur Andersen 

Watch the documentary, "The Smartest Guys in the Room," paying special attention to the 
role played in the Enron fiasco by the accounting firm, Arthur Andersen. Then answer the 
following questions. 

• How important should AA's former, excellent reputation have been in determining how to punish it in 
the role it played in the Enron case? Explain your answer. 

• Enron was only the last of a series of ethics scandals that AA had fallen into. How should it have 
adjusted to prior scandals? (Are the Federal Sentencing Guidelines of any help here?) 

• Consider that Sarbanes-Oxley was passed largely in response to Enron. Do its provisions go far enough 
to prevent future Enrons? Do they go too far?. 

• Using the table that summarizes punishment options provided by French and Fisse, how would you 
construct a punishment for Arthur Andersen? Who should be targeted? Should the company's black 
box be left alone? Is it better to attack financial or non-financial values? Should Arthur Andersen and 
other corporate offenders be encouraged to reform themselves or should those reforms be designed and 
directed from the outside? 



3.1.3.3 

3.1.4 What did you learn? 

Peter French speculates on the possibility that a corporation could consist of nothing more than a sophis- 
ticated software program. He also holds forth the notion of corporate moral personhood (as opposed to 
natural personhood). Now that you have had an opportunity to study the history of and structure of the 
modern corporation, what do you think about the nature of corporations? 

3.1.5 Appendix 
3.1.5.1 Bibliography 

1. Stone, C. D. (1975) Where the Law Ends: The Social Control of Corporate Behavior. 

Prospectr Heights, IL: Waveland Press, INC: 1-30. 

2. Des Jardins, J.R. (1993) Environmental Ethics: An Introduction to Environmental Philoso- 
phy. Belmont, CA: Wadsworth Publishing Company: 37. 

3. Clarke, T. (2004) "Introduction: Theories of Governance-Reconceptualizing Corporate Governance 
Theory After the Enron Experience," in Theories of Corporate Governance: The Philosophical 
Foundations of Corporate Governance, ed. Thomas Clarke. New York: Routledge: 1-30. 

4. French, P. A. (1984) Collective and Corporate Responsibility. New York: Columbia University 
Press.. 

5. French, P.A. (1997) "Corporate Moral Agency" in Werhane, P.H., and Freeman, R.E. Blackwell 
Encyclopedic Dictionary of Business Ethics. Oxford, UK: Blackwell: 148-151. 

6. May, L. (1987) The Morality of Groups: Collective Responsibility, Group-Based Harm, and 
Corporate Rights. Notre Dame, IN: University of Notre Dame Press. 

7. Werhane, P. H. (2008) "Mental Models: Moral Imagination and System Thinking in the Age of Glob- 
alization," in Journal of Business Ethics, 78: 463-474. 

8. Werhane, P. (2007) "Corporate Social Responsibility/Corporate Moral Responsibility: Is There a 
Difference and the Difference It Makes," in eds., May, S., Cheney, G., and Roper, J., The Debate 
over Corporate Social Responsibility. Oxford, UK: Oxford University Press: 459-474. 

9. Fisse, B. and French, P.A., eds. (1985) Corrigible Corporations and Unruly Law. San Antonio, 
TX: Trinity University Press. 

10. Nader, R. and Green, M.J., eds. (1973) Corporate Power in America. New York: Grossman. 

11. Nader,, R. Green, M. and Seligman, J. (1976) Taming the Giant Corporation. New York: Norton. 



61 

12. Davis, M. (1998) Thinking Like an Engineer: Studies in the Ethics of a Profession. Oxford, 
UK: Oxford University Press: 119-156. 

13. Jackall, R. (1988) Moral Mazes: The World of Corporate Managers. Oxford, UK: Oxford 
University Press. 

14. Carol, A. B., "Social Responsibility," in Werhane, P., and Freeman, R. E., eds. (1997, 1998) Blackwell 
Encyclopedic Dictionary of Business Ethics. Oxford, UK: Blackwell Publishers, INC: 593-595. 

15. Dyrud, M.A. (2007) "Ethics, Gaming, and Industrial Training," in IEEE Technology and Society 
Magazine. Winter 2007: 36-44. 

16. Ritz, Dean. (2007) "Can Corporate Personhood Be Socially Responsible?" in eds. May, S., Cheney, 
G., and Roper, J., Corporate Governance. Oxford, UK: Oxford University Press: 194-195. 

3.1.6 EAC ToolKit Project 

3.1.6.1 This module is a WORK-IN-PROGRESS; the author(s) may update the content as 
needed. Others are welcome to use this module or create a new derived module. You can 
COLLABORATE to improve this module by providing suggestions and/or feedback on your 
experiences with this module. 

Please see the Creative Commons License 2 regarding permission to reuse this material. 

3.1.6.2 Funded by the National Science Foundation: "Collaborative Development of Ethics 
Across the Curriculum Resources and Sharing of Best Practices," NSF-SES-0551779 

3.2 Moral Ecologies in Corporate Governance 3 



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3.2.1 Two Thought Experiments 

The Ring of Gyges (Plato's Republic II, S359) 

Gyges a poor shepherd is tending his flock when there is an earthquake. A hugh crack opens in the earth to 
expose a sarcopagus. Gyges reaches in and takes the ring that draws his attention. Later, when he is talking 
among friends, he notices that he becomes invisible when he turns the ring in toward himself. He tries this 
out a few times and then forms his plans. Invisible, he gains entry to the king's castle and rapes the queen. 
Drawing her into his nefarious plan, they kill the king and take over the kingdom. Gyges marries the queen 
and becomes ruler of a large and wealthy kingdom. Somehow it doesn't seem fit to say that he lives "happily 
ever after." But, since he is never caught, it doesn't follow that his ill-gotten gain has made him miserable. 
Before finding his ring, Gyges was, at least outwardly, a well-behaved, just citizen. But the combination 
of vast power and no accountability drew Gyges over to the dark side. Does the human character, like that 



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62 CHAPTER 3. CSR (CORPORATE SOCIAL RESPONSIBILITY) 

of Gyges, dissolve in the face of temptation and lack of accountability? Is the threat of punishment necessary 
to keep individuals moral? Is visibility and the threat of punishment all that stands between an individual 
and a life of injustice? 
The Milgram Experiments 

From 1960 until 1963, Stanley Milgram, a social psychologist, carried out a series of experiments on around 
1000 subjects. Each experiment brought together three participants, a subject (or teacher), a learner, and 
an experimenter. In the initial orientation, the experimenter told the subject/teacher and the learner that 
they were about to participate in an experiment designed to measure the influence of punishment (in the 
form of electrical shocks) on learning. The learner was presented with information. The teacher then asked 
questions based on this information. If the learner answered correctly, then they went on to the next question. 
If the learner answered incorrectly, then he was given an electrical shock by the teacher. With each missed 
question the intensity of the shock increased. The experiment continued until all the questions were asked 
and answered. 

However, these instructions constituted a deception brought upon the teacher/subject by the secret 
collaboration of the experimenter and the learner. The real purpose of the experiment was to determine 
how far individuals would go in turning against their moral views on the basis of an external authority. The 
learner feigned pain and suffering because there was no actual electrical shock. And the learner deliberately 
missed most of the questions in order to force the teacher to progress to higher and what appeared to be 
life-threatening levels of shock. While teachers were not physically forced to continue the experiment over 
the feigned protests of the learners, whenever they tried to stop it, they were told by the experimenter that 
they had to continue to the end. 

Before the Milgram experiments were carried out, a group of psychogists were asked to predict how 
many teachers/subjects would go all the way to the end and give the learner what they thought were life- 
threatening and highly painful shocks. The consensus was that most would stop the experiment early on 
when the learner first began to protest. But the actual results were quite "shocking." Nearly 60 percent of 
the teachers went all the way and gave the learner the maximum shock. You can read more about these 
experiments and how they have been interpreted by reading Milgram 1974 and Flanagan 1991. You Tube 
has several video vignettes on the Milgram Experiments. Simply type "Milgram Experiments" in the search 
window and browse the results. 

Can authority and environment override our everyday moral beliefs as well as the characters constructed 
from them? Is character robust and "trans-situational?" Or is it radically dependent on situation and 
environment? Can normally decent and well-behaved individuals turn into moral monsters given the right 
external conditions? 

From Gyges and Milgram to Moral Ecology 

Both of these thought experiments raise the question of the influence of environment on character. This 
module is designed to help increase the strength of moral character by identifying different organizational 
environments (called "moral ecologies") and having you developing strategies to resist their pressures and 
maintain integrity. 

3.2.2 Introduction 

Corporate governance is defined in the Blackwell Encyclopedic Dictionary of Business Ethics as "concerned 
with those decisions made by the senior executives of a firm and the impacts of their decisions on various 
stakeholder groups." (EBE 147) This module turns corporate governance inside-out and looks at it from the 
perspective of the governed, that is, from the directors, managers, and employees subject to the structures 
and strategies of corporate governance. Corporate environments function as "moral ecologies," that is, 
"the somewhat stable, but constantly negotiated set of values, practices, and influences within societies, 
organizations, professions, and work groups." (Huff et. al., 2008) The thrust of this module is to help you 
begin to strategize on how to develop sustainable moral careers within different moral ecologies. You will 
study different kinds of moral ecologies using a taxonomy developed from the research of Michael Davis in 
Thinking Like an Engineer and Robert Jackall in Moral Mazes. Huff (2008) provides some generic 
strategies for individuals to pursue within in these organizational environments. But the exercises included 



63 

in this module will encourage you to expand upon this list. Working through this module will help you to 
view corporate governance from within from the micro perspective of the individual. Another module will 
allow you to see corporate governance from the outside from the macro point of view. 

3.2,3 What you need to know . . . 

3.2.3.1 Personality Characteristics: The "Big Five" (plus one) 

So much of success in practical and professional ethics lies in anticipating and defusing potential ethical chal- 
lenges. Called "Preventive Ethics," this approach encourages you to develop the skill of uncovering latent or 
hidden ethical problems that could erupt into full-blown ethical dilemmas. "An ounce of prevention is worth 
a pound of cure." This module is designed to help you reflect on your personalty, different organizational 
environments or ecologies, and how your personality fits into these moral ecologies. Your success depends 
on developing plans for successful moral careers that respond to your personality traits and resist ethical 
challenges presented by organizational environments. 

Personality Characteristics: Find your place on the continuum 

1. Extraversion Introversion 

2. Neuroticism Emotional 

Stability 

3. Conscientiousness Carelessness. 

4. Agreeableness Disagreeableness 

5. Openness (to experience Closed (to experience) 

6. Honesty/Humility Dishonesty/ Arrogance 



3.2.3.2 Three Moral Ecologies 



Summary Table 



Type / Char- 


Managers 


Centrality of 


Allocation of 


Withholding 


Treatment of 


acteristics 


and engi- 


ethics and 


praise and 


information 


dissent and 




neers: role 


values 


blame 




DPOs 




and partici- 












pation 










Finance- 


Managers 


Ethics and 


Allocated 


Managers 


"Shoot the 


Driven 


play line 


values are side 


according 


withhold to 


messenger!" 




role (=make 


constraints 


to hierarchi- 


control and 


Dissent = 




decisions) En- 


dealt with 


cal position: 


protect secrets. 


disloyalty and 




gineers provide 


when they op- 


praise goes 


Engineers 


betrayal. 




technical infor- 


pose financial 


up and blame 


withhold bad 






mation (=staff 


considerations 


goes down. 


news to avoid 






role) 






blame. 










c< 


mtinued on next ps 


ge 



64 



CHAPTER 3. CSR (CORPORATE SOCIAL RESPONSIBILITY) 



Customer- 


Managers 


Ethics and 


Praise and 


Information 


Differences oc- 


Driven 


make decisions 


values are not 


blame are 


not withheld 


cur but engi- 




on financial 


central but are 


fairly allo- 


but gaps arise 


neers are ex- 




matters. En- 


still important. 


cated based 


because or role 


pected to advo- 




gineers "go to 




on assigned 


differences. 


cate their per- 




the mat" on 




responsibility 




spective in de- 




engineering 




and contribu- 




cision making 




matters. 




tion. 




process. 


Quality- 


Manager and 


Ethics and 


Praise and 


Open consen- 


Engineers 


Driven 


engineering 


values are con- 


blame are 


sus process 


and managers 




distinction 


stitutive of the 


attributed to 


ensures that 


work toward 




drops out. 


organization's 


group and 


needed in- 


consensus by 




Interdisci- 


identity. 


distributed 


formation is 


gathering more 




plinary work 




to individ- 


integrated 


information, 




teams are em- 




uals within 


into decision 


continuing the 




powered and 




according to 


making 


discussion, and 




responsible 




contribution. 




(as last resort) 
postponing the 
decision until 
consensus is 
reached. 



Table 3.4 



Breakdown of Table 



Moral ecologies can be categorized according to a series of considerations. The table above focuses on 
five. 

First, managers and engineers occupy distinct roles and participate differently in the decision making 
process. Managers play the line role. They collect information to make decisions that govern the day 
to day operations of the corporation. Engineers are hired as staff employees. They provide technical 
information to decision makers but do not participate directly in the decision making process. This 
raises difficulties when engineers, for technical or ethical reasons, disagree with the decisions taken by 
their managers. The line and staff roles channel decision making and constrain dissent. 
Moral ecologies can also be typed according to the centrality of ethical considerations in the corpora- 
tion's goals, charter, operations, and even identity. Ethical considerations can range from (1) playing 
a central role, (2) to playing an important but subordinate role, (3) to being marginalized as irrele- 
vant side constraints. The importance a corporation places on ethics colors all the other categories 
mentioned in the table above. If ethics is central to a corporation then it plays a central role in the de- 
cision making process, guides the allocation of praise and blame, determines the nature and amount of 
information shared in the decision making process, and determines how an organization treats dissent 
and disagreement. 

A corporation's conception of responsibility is revealed through the ways in which it allocates praise 
and blame. Significant differences arise between the way finance companies assign praise and blame 
and the ways these are allocated in quality or customer driven companies. Again, this related to the 
roles played by engineers and managers and the centrality of ethics in the corporation's governance. 
Ethical problems arise when crucial information is withheld from the decision making process. Hence, 
the flow of communication and the kinds of situations in which communication flow is disrupted helps 
to characterize a moral ecology. For example, the Hitachi report asserts that communication between 
managers and engineers breaks down predictably within finance-driven companies. This breakdown is 
grounded in the characteristics of the finance-driven moral ecology, especially in differences between 



65 

the managerial and engineering roles and the extent to which managers and engineers participate in 
decision making. 
• Finally, moral ecologies can be classified according to how they treat dissent and dissenting professional 
opinions. Dissent is less likely in quality than in finance-driven companies. While finance-driven 
companies treat dissent as disloyalty, quality- and customer-driven driven companies treat dissent as 
a stage in the process of reaching consensus. 

Finance-Driven Companies 

1. Finance-driven companies place financial objectives at the very heart of their constitutive objectives 
and corporate identity. For example, such companies are focused on maximizing returns for investors. 

2. Manager and Engineer Roles and Participation in Decision Making Process: Managers play 
the line role in that they make the decisions that drive the day to day operations of the corporation. 
They bear responsibility for the consequences of their decisions and they are also responsible as the 
faithful agents of the company's directors. Being a faithful agent requires that one treat another's 
interests as one's own, maintain confidentialities, and avoid interests that conflict with the director. 
Engineers play the staff role, that is, they answer questions put to them by managers and are responsible 
for providing competent technical information. However, they do not participate directly in the decision 
making process, nor do they bear responsibility for the results of their manager's decisions. 

3. Centrality of ethics and values in the corporations decision making process: Ethical consid- 
erations play only the role of side constraits in the setting of corporate policity and in the formulation 
and execution of its decisions. This means that ethical considerations are important only if they 
promote or interfere with the central, financial objectives. If appearing philanthropical is good for a 
corporation's image (and generates customers and profits) then the corporation appears philanthropic. 
If the corporation is likely to get caught in an ethical violation (excessive pollution) and this negative 
publicity will lower its prestige (and profits) then the corporation will not commit the violation. But 
in each case, the end is the promotion of financial objectives and the means are appearing ethical. 

4. Allocating Praise and BlameJackall goes into detail on how finance-driven corporations (and bu- 
reaucracies in general) assign praise and blame. The crucial factor is one's position in the corporate 
hierarchy. Praise works its way up the corporate ladder. If engineer Smith saves the company from a 
sever financial loss, then Smith's supervisor (or his supervisor's supervisor) gets the credit. However, 
if Smith's supervisor messes up, the blame passes down the corporate ladder to Smith. Praise moves 
up the corporate hierarchy, blame down. 

5. Information Exchange between Engineers and Managers: In finance driven companies, man- 
agers withhold information from the engineers under their supervision for a variety of reasons. For 
example, if it is proprietary information, the manager may withhold all or part to prevent engineers 
from leaving the firm and revealing its secrets to a competitor. Managers may also use information 
to wield power and authority. By keeping engineers in the dark (like mushrooms) they effectively 
maintain authority and prevent dissent. On the other hand, engineers withhold bad news from their 
managers to avoid blame as well as the "shoot the messenger" syndrome. (When the incompetent 
general receives bad news from a soldier, he shoots the soldier rather than respond to the news.) 

6. Handling Dissenting Professional Opinions: Dissent is interpreted as disloyalty in finance-driven 
companies. This organizational habit (maintained by managers to hold on to their authority) will 
even undermine DPO (dissenting professional opinion) procedures that look good on paper. A good 
DPO procedure communicates the opinion to several levels of supervisor, allows for the independent 
investigation of the merits of the opinion, and prevents retaliation against the professional asserting the 
opinion. But ruthless managers find ways to undermine such a procedure at all levels. Engineers may 
claim the right not to be held as scape goats to administrative incompetence. (See the Theory Building 
Activities: Rights module) This right may be supported on paper by a detailed DPO procedure. But 
it also has to be implemented at all levels and continually monitored. 

Customer-Driven Companies 



66 CHAPTER 3. CSR (CORPORATE SOCIAL RESPONSIBILITY) 

• Customer-driven companies focus on customer satisfaction. If the customer asks for or is satisfied with 
a lower quality product, then this is an acceptable result for this type of company as opposed to a 
quality driven company which would stand fast with the higher quality product. 

• Managers and engineers: roles and participation: Managers make decisions on financial matters. 
But engineers are expected to "go to the mat" for engineering standards when these form all or part of 
the decision. Hence the distinction between managers (playing the line role) and engineers (playing the 
staff role) weakens, and engineers play a much more active role (advocates for engineering standards) 
in decision making. (Engineering standards include engineering ethics standards.) 

• Centrality of Ethics and Values: While customer satisfaction plays the central role, ethical consid- 
erations are still important, especially regarding the ethical treatment of customers and reflecting the 
ethical values held by the customers. In many cases, it is difficult to distinguish quality and customer 
driven companies as the role ethical standards play gets closer to a central, constitutive one. 

• Allocation of Praise and Blame: Responsibility in customer driven companies is tied closely to 
individual performance and contribution. This is because customer satisfaction is a more objective 
criterion than the internal political standards that dominate finance driven companies. Responsibility 
is closely alligned with contribution. 

• Withholding Information: Information enhances control and responsibility. (The more you know, 
the more reponsibly you can act.) Since praise and blame are allocated according to contribution, 
there is less incentive to withhold information. If communication gaps arise between engineers and 
managers, these are much more likely to hinge on disciplinary differences. Engineers may have trouble 
communicating technical information to managers, or appear condescending by "dumbing down" the 
information. Managers may have difficulties communicating financial constraints to engineers who 
focus on quality standards. But these are minor, resolvable gaps. 

• Treatment of Dissent: Dissent and disagreement are not only tolerated but actually expected. 
Managers expect engineers to advocate for issues in their sphere as they pertain to the decision making 
process. This process itself is adversarial because it is assumed that this is the best way to get all the 
information out on the table. Bad news and professional dissenting opinions are not interpreted as 
disloyalty; in fact, disloyalty lies in refusing to expose flaws in the choices proposed by one's supervisor. 
Managers expect their engineers to "go to the mat" when advocating technical positions based on their 
professional judgment. 

Quality-Driven Companies 

• Quality-driven companies stand out for the emphasis they place on achieving high engineering standards 
and on elevating the participation of the engineer in the decision making process. As is implied by 
the name, the central focus of these corporations is the achievement of high quality in products and 
services. 

• Managers and Engineers: Role and Participation: In quality-driven companies, the distinction 
between the manager and engineering roles drops out. For example, while engineers play the staff 
role and provide expert engineering advice, they also participate fully in the decision making process. 
The locus of decision making moves from individual managers to small interdisciplinary groups. These 
groups, in turn, carry out consensus-based decision making procedures. 

• Centrality of Ethics and Values: In quality-driven companies, ethics and values are central to the 
organization's objectives, charter, and identity. This has a decisive impact on the role of the engineer 
in the decision-making process. In customer driven companies, engineers are expected to advocate 
engineering and ethical standards precisely because these are not central to the organization's identity. 
But the centrality of ethical concerns in quality driven companies changes the engineer's role from 
advocacy to channeling technical expertise toward realizing ethical value. 

• Allocation of praise and blame: In customer-driven companies, blame avoidance procedures no 
longer dominate the decision making process. In quality driven companies they disappear completely. 
Decisions are made by interdisciplinary groups in which engineers and managers participate fully and 
equally. Responsibility (praise and blame) then is allocated to the group. If it is distributed to members 



67 

inside the group it is done so on the basis of contribution. But the primary target of responsibility 
ascriptions is the group, not the individual. And the response to untoward happenings is not targeting 
individuals and groups for blame but taking measures to learn from mistakes and avoiding them in the 
future. 

• Withholding Information: The open, consensus-based decision process ensures that the needed 
information is brought forth and integrated into the decision. This results from removing a primary 
motivation to withholding information, namely, blame avoidance. Quality-driven corporations aggres- 
sively move to prevent untoward occurrences and, should prevention fail, make adjustments to ensure 
they do not reoccur. The motive to withhold information does not arise in this moral ecology. 

• Treatment of Dissent and DOPs (dissenting professional opinions): Engineers and managers 
work toward consensus by gathering information, discussing the problem and continuing the discussion 
until consensus is reached. Thus, dissent does not stand alone but is considered to be an essential 
and healthy component to the decision-making process. When consensus is not immediately reached, 
participants seek more information. If consensus is still not reached, the decision is postponed (if this 
is possible). The most viable strategy to reach consensus is to continue the discussion. For example, an 
engineer and manager might approach a supervisor; in this way they bring a new perspective into the 
decision-making process. They might consult other experts. The crucial point here is that disagreement 
(really non-agreement) is not a bad thing but a necessary stage in the process of reaching agreement 
and consensus. 

Skill Sets 

• The four skills described below are derived from studying the moral expertise displayed by moral 
exemplars. Each moral ecology will require the exercise of each of the skills described below. However, 
each skill has to be contextualized into the moral ecology. For example, reasonableness should not be 
exercised in the same way in a finance-driven company as it should be exercised in a quality-driven 
company. The reasonable exercise of dissent is manifested differently in an environment where dissent 
is equated with disloyalty than in one in which dissent is embraced as a necessary part of the consensus- 
reaching process. So your job, in constructing your moral careers within these different moral ecologies, 
is to contextualize the skill, that is, describe specifically how each skill should be practiced in each 
particular moral ecology. 

• Moral imagination consists of projecting oneself into the perspective of others. It also includes 
multiple problem definitions and the ability to distance oneself from the decision situation to gain 
impartiality. 

• Moral creativity is the ability to generate non-obvious solutions to moral challenges while responding 
to multiple constraints. 

• Reasonableness consists of gathering relevant evidence, listening to others, giving reasons for one's 
own positions (arguments and evidence), and changing plans/positions only on the basis of good 
reasons. 

• Perseverance involves planning moral action and responding to unforeseen circumstances while keep- 
ing moral goals intact. 

Personality Traits 

• Extraversion: Extraversion, which is paired with its opposite, introversion, has also been called 
confident self-expression, assertiveness, social extraversion, and power. An individual in whom this 
trait dominates tends to be assertive and out-going. 

• Conscientiousness: Individuals with this trait are successful in carrying out tasks because they can 
discipline themselves to stay focused on a task. They are successful in the right moral ecology and tend 
to conform to the basic norms of their environment. This trait can lead to bad results if not guided by 
moral considerations. 

• Neuroticism: This trait indicates a lack of emotional stability. According to Huff et al., "it is 
correlated with less effective coping and depression." Neuroticism has also been shown to interfere 



68 CHAPTER 3. CSR (CORPORATE SOCIAL RESPONSIBILITY) 

with the exercise of moral skills. Is there a particular moral ecology that can heighten the negative 
impacts of this personality trait? 

• Agreeableness: According to Huff et al, this trait has also been called "social adaptability, likability, 
friendly compliance, and love." Again think about how this trait would operate within a finance-driven 
moral ecology as opposed to a quality-driven one. 

Two Kinds of Moral Expertise 

• Studies carried out by Chuck Huff into moral exemplars in computing suggest that moral exemplars 
can operate as craftspersons or reformers. (Sometimes they can combine both these modes.) 

• Craftspersons (1) draw on pre-existing values in computing, (2) focus on users or customers who have 
needs, (3) take on the role of providers of a service/product, (4) view barriers as inert obstacles or 
puzzles to be solved, and (5) believe they are effective in their role. 

• Reformers (1) attempt to change organizations and their values, (2) take on the role of moral crusaders, 
(3) view barriers as active opposition, and (4) believe in the necessity of systemic reform 

• These descriptions of moral exemplars have been taken from a presentation by Huff at the STS collo- 
quium at the University of Virginia on October 2006. 

3.2.4 What you will do ... 

In this section, you will learn about this module's activities and/or exercises. You will also find step by step 
instructions on how to carry them out. 

Exercise 1: What we do when nobody is looking 

• You will be asked either to defend or criticize the following position on the nature and 
function of punishment 

• Entiendo que ser castigado es una manera de educar a la persona a cometio la falta y a la sociedad 
en general para que comprendan y entiendan que su conducta es una falta y afecta a la sociedad. En 
conclusion es una solucion viable hasta el memento bastante efectiva siempre y cuando el castigo sea 
ejecutado de una manera prudente, saludable y dentro de lo que las leyes permiten. 

• Restate this argument in your own words. (Try to shorten it by summarizing its key points.) Then 
discuss and clarify its key terms. Offer ethical and practical considerations in its defense. 

Exercise 2: Milgram and Business 

• Continuing with the task in part one, you will be asked to either defend or criticize the 
following position on the meaning that the results of the Milgram experiments have for 
business administration 

• The Milgram experiments teach us that under the right conditions, anyone is capable of committing 
immoral activities. If a strong, dominant boss exists and has a weak, dependable employer, then the 
employer will out of necessity do whatever the boss wants. 

• Many people are willing to commit immoral acts even though they know it is wrong if they know they 
are not being watched. 

• It teaches us that many employees tend to do illegal works just because their managers ask them to so 
they assume they will be taking full responsibility for the situation even though it is unethical. 

Exercise 3: Commentary Groups 

• Your job is to evaluate the arguments made by the teams debating in parts one and two. 
Be sure to focus on the argument and not the content of the position. Listen to their 
statements. 

• Do they base these on sound statements? 

• What kind of ethical and practical principles (or values) do they use to make their case? 



69 

• Do their frame their position broadly or narrowly? 

Exercise 4: Closure Groups 

• After listening to the debate and commentary, recap what has happened and discuss 
whether there are any conclusions that can be drawn from this activity 

• Do people agree or disagree about these 2 issues? 

• If there is agreement, why does it exist? 

• If there is disagreement, why does it exist? 

• Is agreement possible? Why or why not? 

Exercise 5 

• Which moral ecology would you like to work in: finance-, customer, or quality-driven companies? 

• Why? Specify your answer in terms of how the company allocates praise or blame, the centrality of 
moral concerns, the role given to professionals, the circumstances under which information is withheld, 
and the typical response to bad news. 

• Why? What configuration of personality traits best fits within which moral ecology? 

3.2.5 What did you learn? 

This module was designed to help you visualize how to realize a moral career within three dominant moral 
ecologies. Apply these matters to yourself. Which moral ecology would be best for you? Of the two moral 
careers mentioned above, reformer and helper, which best fits your personality? Why? In other words, begin 
the process of visualizing and planning your own moral career. 

3.2.6 Appendix 

References 

1. Davis, M. (1998) Thinking Like an Engineer: Studies in the Ethics of a Profession. Oxford, 
UK: Oxford University Press: 117-156. 

2. Doris, J.M. (2002) Lack of Character: Personality and Moral Behavior. New York: Cambridge 
University Press. 

3. Flanagan, O. (1991) Varieties of Moral Personality: Ethics and Psychological Realism. Cam- 
bridge, Mass: Harvard University Press: 293-314. 

4. Harris, C.E., Pritchard, M.S., and Rabins, M.J. (1999) Engineering Ethics: Concepts and Cases, 
2nd Ed. New Jersey: Wadsworth: 181-188. 

5. Huff, C, Barnard, L. and Frey, W. (2008) "Good Computing: A Pedagogically focused model of virtue 
in the practice of computing, Part II," in The Journal of Information, Communication and 
Ethics in Society. (Under Review) 

6. Jackall,R. (1983). "Moral Mazes: Bureaucracy and Managerial Work," in Harvard Business Re- 
view: Sept and Oct 1983. 

7. Jackall, R. (1988) Moral Mazes: The World of Corporate Managers. Oxford, UK: Oxford 
University Press. 

8. Mannix, E., and Neale, M.A. (2005) "What Differences Make a Difference?: The Promise and Reality 
of Diverse Teams in Organizations," in American Psychological Society, 6(2): 31-49. 

9. Milgram, S. (1974) Obedience to Authority. New York: Harper Perennial. 

10. Solomon, R.C. (2003) "Victims of Circumstances?: A Defense of Virtue Ethics in Business," in Busi- 
ness Ethics Quarterly. Volume 13, Issue 1: 43-62. 

This optional section contains additional or supplementary information related to this module. It could 
include: assessment, background such as supporting ethical theories and frameworks, technical information, 
discipline specific information, and references or links. 



70 CHAPTER 3. CSR (CORPORATE SOCIAL RESPONSIBILITY) 

3.2.7 EAC ToolKit Project 

3.2.7.1 This module is a WORK-IN-PROGRESS; the author(s) may update the content as 
needed. Others are welcome to use this module or create a new derived module. You can 
COLLABORATE to improve this module by providing suggestions and/or feedback on your 
experiences with this module. 

Please see the Creative Commons License 4 regarding permission to reuse this material. 

3.2.7.2 Funded by the National Science Foundation: "Collaborative Development of Ethics 
Across the Curriculum Resources and Sharing of Best Practices," NSF-SES-0551779 

3.3 Three Views of CSR (Corporate Social Responsibility) 5 



Word Version of this Template 

This media object is a downloadable file. Please view or download it at 
< EAC TK STD TEMPLATE.doO 

Figure 3.3: This is an example of an embedded link. (Go to "Files" tab to delete this file and replace 
it with your own files.) 



- The first two links to this module are to sample corporate social 
responsibility statements put out by McDonalds and Starbucks. These 
will help you to benchmark your own efforts both in the fictional 
Burger Man case and in your efforts to develop CSR reports for real 
companies . 

- The other link is a story from reporter, Paul Solomon, that reports on 
the annual Business for Social Responsibility conference. This story, 
first broadcast on December 23, 2004 reports on outstanding and suc- 
cessful efforts on CSR. Its title is "Good Business Deeds" and it was 
accessed for this module on August 17, 2008 at the following URL: 
http: //www.pbs . org/newshour/bb/business/july-dec04/corporate_12-23 .html 

3.3.1 Introduction 

This module will introduce you to the theme of corporate social responsibility. Three representative cases 
will help to pose the central problems and basic issues of CSR. Then you will work on developing a social 
contract between the business corporation and society to articulate the interests, goods, and rights at stake in 
CSR. Three different approaches dominate this field: the shareholder approach set forth by Milton Friedman, 
the stakeholder approach articulated by Evan and Freeman, and Patricia Werhane's alliance model. Finally, 
you will work on developing a CSR program for the hypothetical corporation, Burger Man. This will be 
based on a shareholder meeting that consists of six or seven stakeholder presentations. (You will play the 

4 http://creativecommons.org/licenses/by/2.0/ 

5 This content is available online at <http://cnx.Org/content/ml7318/l.6/>. 



71 

role of one of the stakeholders.) Your CSR program will address and integrate the needs and interests of the 
Burger Man stakeholders. 
Three CSR Challenges 

Patricia Werhane discusses how six corporate organizations deal with three CSR challenges: (1) carrying out 
oil drilling in a corrupt political environment, (2) working with suppliers who impose sweatshop conditions 
on employees, and (3) addressing the HIV/AIDS challenge in Africa. Each challenge elicits two corporate 
responses, one from a shareholder or stakeholder perspective, the other from an alliance perspective. Shell 
Oil's response to political corruption in Nigeria will be compared with Exxon/Mobile's response in Chad 
and Cameroon. Nike's answer to public criticism of the employment practices of its third world suppliers 
will be compared to Wal Mart's reputedly heavy-handed treatment of its employees and suppliers. Finally, 
while the pharmaceutical industry has developed an expensive drug cocktail to treat HIV/AIDS in patients 
in developed nations, the NGO (Non Government Organization), the Female Health Company, has designed 
a program to distribute of condoms to prevent infection in the first place. These paired corporate responses 
to CSR challenges are not provided in support of the position that the superiority of the alliance approach 
is a "no-brainer." Instead, they provide you with a menu of CSR strategies that you will evaluate using the 
CSR framework you will develop out of the social contract that between business and society. These three 
CSR challenges come from Werhane (2007) 

Operating in a Corrupt Environment 

• A big challenge facing multinational corporations is how they should respond to local corruption. Both 
Shell Oil and Exxon/Mobile sought to carry out drilling operations at sites plagued by corrupt local 
and national governments. 

• Shell took a shareholder approach arguing that their primary CSR was to their stockholders and that 
involvement in corrupt local politics would be tantamount to paternalism. 

• Exxon/Mobile, on the other hand, adopted a more active approach. They took expensive measures to 
mitigate the environmental impact of their operations. They also hired and provided technical training 
to local residents. Finally, they worked to ensure that the revenues they introduced into the local 
communities were not lost through political and business corruption. 

• What are the CSRs of multinational corporations that operate in corrupt local environments? Are 
these fashioned around the minimal obligation of creating no additional harm? Or should they expand 
to preventing harm (if possible) that others are about to inflict? To move even further up the ladder of 
responsibility, do multinational corporations have positive, supererogatory responsibilities that consist 
of adding value to the communities they do business in? 

Vicarious CSR: Responding to Supplier Sweatshops 

• Vicarious responsibility occurs when one agent accepts responsibility for actions executed by another. 
For example, under agency theory, the principal bears overall moral and legal responsibility for the ac- 
tion since he or she has originated it. Although the agent executes the action, he or she is responsibility 
only for executing the action faithfully and treating the principal's interests as his or her own. 

• In this context, can we hold corporations such as Nike and Wal Mart vicariously responsible for the 
morally questionable actions of their suppliers? If so, then under what conditions? 

• Nike fell under siege when the press found out that its suppliers based in the third world imposed 
harsh, sweatshop conditions on their employees, including child labor. Nike could have argued that 
this was beyond the scope of their repsonsibility. How could they be held vicariously responsible 
for the actions of another? Their job was to produce shoes at the lowest possible price to deliver an 
affordable quality product to customers and to maximize shareholder value. But Nike went beyond this 
minimal responsibility to carefully vet suppliers and to work with them to improve working conditions. 
Thus, they expanded the scope of their CSR to include improving working conditions for, not only 
their employees, but also the employees of their suppliers. 

• Wal Mart has been identified by Collins and Porras (Built to Last) as a highly successful and visionary 
company. It has certainly led the way in providing consumers with high quality products at surprisingly 



72 CHAPTER 3. CSR (CORPORATE SOCIAL RESPONSIBILITY) 

low prices. But the savings it provides to customers and the high returns it guarantees investors are 
purchased at a high price. Wal Mart prevents its employees from joining unions which has lowered 
their wages and restricted their health and retirement benefits. Wal Mart employees are also expected 
to work long hours for the company. While it provides cheap, high quality products to its customers, 
Wal Mart pushes suppliers narrowing their profit margin and placing upon them the responsibility of 
supplying product just-in-time to meet demand. 

• In its earlier days, Wal Mart targeted small towns. Their competitive practices forced less aggressive, 
local business to leave. While they have brought considerable benefits to these communities, they have 
also seriously changed established business and social structures. 

• Finally, Wal Mart, like Nike initially, exercises minimal supervision over their suppliers many of whom 
are oversees. Wal Mart suppliers also have been known to impose harsh working conditions on their 
employees. 

Some CSR Questions for Nike and Wal Mart 

1. From a broader CSR perspective, is Nike maximizing stakeholder value? Is it redistributing burdens 
and costs from customers and investors to its suppliers and their employees? Does CSR allow this 
redistribution of the corporate wealth form the shareholders to other stakeholders? (Think about 
Friedman's arguments here. 

2. If it is necessary to trade off stakeholder stakes as both Wal Mart and Nike do, which trade off is 
more just? Nike's distribution of its wealth from its stockholders to the needy manifested in its efforts 
to improve the working conditions and income of the employees of its suppliers? Or Wal Mart's 
distribution of benefits to its stockholders and its comparatively prosperous customers? 

3. Which model would Friedman prefer under the his version of the shareholder view of CSR? Explain 
and evaluate. 

4. Which model would be preferable by Evan and Freeman under the stakeholder view? Who are Nike 
and Wal Mart's stakeholders? What are their stakes? How should the wealth produced by these two 
corporations be distributed among their stakeholders? 

5. Werhane, in her alliance model, argues for the importance of a CSR model that decentralizes the 
corporation and facilitates morally imaginative solutions. Why does she argue that Nike's program is 
than Wal Mart's from this perspective? What could Wal Mart do to improve its CSR on the alliance 
view? 

Facing the AIDS Challenge in Africa 

• The widespread and devastating effects of the AIDS epidemic in Africa are well known. But what are 
the responsibilities of corporations in the face of this terrible CSR challenge? Should they do business 
as usual and allow others who are perhaps more qualified respond to this pervasive social problem? Or 
should they recognize a broader responsibility to channel their wealth, knowledge and expertise toward 
mitigating this social problem? 

• Pharmaceutical corporations invest huge amounts of money in research and development. The market 
place is a good place for both encouraging this necessary risk and for distributing it among several 
groups and interests. Developing new medicines requires costly research. So Friedman's question 
is highly pertinent here: does imposing CSR on a corporation do more harm than good because it 
interferes with the delicate mechanism of the market? 

• At any point along the way, the product may not meet expectations, a competitor may beat the 
pharmaceutical to the market, the regulatory process may delay or even prevent sale, and so on. The 
rewards from patenting a successful medicine are astoundingly high. But heavy, possibly devastating 
losses are also possible. Adding CSR to the mixture may be the formula for corporate disaster. 

• Pharmaceutical corporations also face daunting challenges from regulatory agencies such as the Food 
and Drug Administration. New products must be exhaustively and painstakingly tested to avoid 
problems that have arisen in the past such as the Dalkon Shield and Thalidomide. Again, considerable 
effort must be expended in exploring the middle and long term consequences accompanying product 



73 

and drug use, and all of this before the product can be marketed and profits made. Government 
regulation also raises another problem. Is government prodding necessary to force corporations into 
a proper CSR posture? Or should corporations be allowed to develop voluntarily their own CSR 
responses? 

• In the case at hand, pharmaceutical companies have invested considerable resources to carry out 
research into medicines that control HIV infection and prevent it from developing into full-blown 
AIDS. But these treatments are very expensive and bring with them considerable side effects. An anti- 
AIDS chemical cocktail can cost patients in developed nations between 15 and 20 thousand dollars 
per patient per year. This is far beyond the financial resources available to a typical HIV/AIDS 
patient in Africa. Some NGOs and critics of the pharmaceutical industry accuse the latter of gouging 
victims and drawing excess profits from the misfortune of others. A spokesperson for "Doctors Without 
Borders," for example, claims that the AIDS treatment "cocktail" that costs U.S. patients 15 to 20 
thousand dollars could be made available to Africans at less than 300 dollars per patient per year. 
Pharmaceuticals, according to their critics, need to rethink their CSR, cease operating as for-profit 
businesses, and make these drugs available to third world sufferers at cost. 

• What are the CSRs of multinational pharmaceutical corporations for making HIV/AIDS drugs available 
to victims in the poverty-stricken nations of Africa? Are they responsible for charging what the 
market will bear? Assuming they have the right to recoup their heavy investment in research, should 
governments, recognizing the necessity of compensating drug companies for their research, buy these 
drugs and redistribute them at little or no cost to those who can't afford them? Or should the 
pharmaceuticals charge more to those who can pay and less to those who cannot? (This redistributes 
the burden of cost from the haves to the have nots.) 

• Many NGOs have taken the stance that their responsibility lies in pressuring drug companies to do 
the right thing and donate medicines to patients who cannot pay. This is their corporate social 
responsibility, and the pharmaceutical industry certainly has enough money to do this. 

• But others have tried to reframe this issue using moral imagination. Treating individuals for HIV 
infection once they have contracted it is expensive no matter how you look at it. But, redefining the 
problem, can moderate and affordable measures be taken to prevent the spread of the disease? 

• This is the imaginative approach taken by the Female Health Company which has initiated a widespread 
effort to distribute condoms to those at risk for contracting AIDS. 

• How does the approach of the FHO exemplify Werhane's alliance model? How should pharmaceutical 
companies respond to this kind of initiative? Is it necessary to frame the relation between the phar- 
maceutical industry and NGOs as an adversarial relation or should broader alliances be formed that 
coordinate the efforts of these groups? 

3.3.2 The Social Contract between Business and Society 

Every contract is built on the basis of three conditions (1) free and informed consent, (2) a 
quid pro quo, and (3) the rational self interest of the contracting parties. 

• Free and Informed Consent: No contract is legitimate that is based on force, fraud or deception. 
The parties must enter into this agreement freely and without compulsion. They must understand 
the terms of the contract which excludes deception and fraud. In short, the contract presupposes the 
uncoerced participation of all the parties. To enter into the contract they must understand all the key 
issues and consent to the constitutive exchange. 

• Quid Pro Quo: Quid Pro Quo literally means something in exchange for something. Every contract 
is built around a mutually beneficial exchange. I give you my baseball cap in exchange your ice cream. 
Most exchanges are simultaneous. But some are what Hobbes calls "covenants." Here I give you my 
baseball cap with the understanding that later this afternoon you will pass by your refrigerator, get 
my ice cream cone and give it to me. I give you my part now and trust you to carry out your part 
later. 



74 



CHAPTER 3. CSR (CORPORATE SOCIAL RESPONSIBILITY) 



• Rational Self Interest: Each of us should know the value of the items to be exchanged. (That 
is one reason why a contract requires free and informed consent.) This knowledge is determined, in 
part, by the preference schedules that we have developed as rationally self-interested beings. So a 
legitimate contract assumes that I have interests, that I am capable of determining what promotes 
these interests, and that I am rational enough to determine means to promote them and avoid other 
means that interfere with them. 

Social Contracts 

A social contract differs from other contracts because it is hypothetical. Business and Society have never 
sat down in a room and hammered out a contract outlining their relation. But this hypothetical contract 
provides a good means of making sense out of the relation that has gradually evolved between society and 
business. Forget for a moment the historical details of the relation between business and society. If this 
relation is summarized as a contract, what does society give to business? What does business give to society? 
Do these two institutions trust one another or do they each adopt means to monitor and control the other? 
What are these means? Treating the relation between business and society as a contract between two 
mutually consenting agents or actors does get some of the facts wrong. But it provides a useful "heuristic" 
device, i.e., a framework that will help us to summarize, structure, and, in a work, make sense of the relation 
between the two. Moving from the terms of this "contract" you will be able to develop a framework for 
understanding the social responsibilities of business corporations. This, in turn, will help you to understand 
the CSR challenges presented above and the CSRs of the fictional but realistic Burger Man corporation. 

Exercise 1: In small groups, spell out the social contract between society and business. 

• How can the absence of force, deception, and fraud be guaranteed in this contract? How should each 
side hold the other accountable? (This is especially the case where one side delivers at one time and 
the other side is trusted to deliver later.) 

• What benefits can busines bring to society? How can society benefit business. Develop a table with one 
column listing what business has to contribute to society and the other what society has to contribute 
to business. This table is the heart of your social contract. 

• Assume that society and business are rationally self interested. How does this effect the formulation of 
the goods of the exchange? How does this enforce the terms of the contract? Are these self interests 
divergent? (Then each side must monitor the other to prevent the corruption of the contract.) Are 
these interests convergent? (Then the contract consists largely in building social capital and trust 
between the contracting parties.) 

• Donaldson, 1993 uses social contract theory to account for the rights and duties of multinational 
corporations 

Exercise 2: CSR and STS 

Choose one of the CSR challenges above and construct a socio-technical table around it 

STS Table 



Component Technology Technolog; 

(Soft- 



/ Em- 
bedded 
Value 



(Hard- 
ware) 



ware) 



Physical 
Sur- 
round- 
ings 



StakeholderProcedure? Laws 



Informati 
and 
Infor- 
mation 
Systems 



continued on next page 



75 



Justice 
















Free 
Speech 
















Property 
















Privacy 
















Safety 

















Table 3.5 



3.3.3 Three CSR Frameworks 

Shareholder View 

From Milton Friedman, "The Social Responsibility of Business is to Increase Its Profits." "But the doctrine 
of "social responsibility" taken seriously would extend the scope of the political mechanism to every human 
activity. It does not differ in philosophy from the most explicitly collectivist doctrine. It differs only by 
professing to believe that collectivist ends can be attained without collectivist means. That is why, in my 
book Capitalism and Freedom, I have called it a "fundamentally subversive doctrine" in a free society, 
and have said that in such a society, "there is one and only one social responsibility of business-to use its 
resources and engage in activities designed to increase its profits so long as it stays wihtin the rules of the 
game, which is to say, engages in open and free competition without deception or fraud." 1970 by New York 
Times Company 

Stakeholder View 

• A stakeholder must be distinguished from a stockholder. The latter owns a share of the corporation. 
On the other hand, a stakeholder is any group or individual that has a vital interest in the doings of 
the corporation. Hence the stockholder is a stakeholder of the corporation whose vital interest at play 
is the share owned of the corporation and the money invested in this share. 

• There are several other stakeholders of the corporation. These include (1) employees, (2) customers, (3) 
suppliers, (4) local community, (4) surrounding governments, (5) the surrounding human and natural 
environment, and (6) the corporation's managers. (In some situations there are other stakeholders 
such as competitors.) 

• Stakeholder theory requires that the corporation recognize and respect the vital interests of each of 
its surrounding stakeholders. This frequently issues in proposing stakeholder rights and assigning to 
others correlative duties to recognize and respect these rights. 

• Stakeholder theory also requires that the corporation integrate interests where possible, mediate or 
broker conflicts between interests, and only trade off competing interests when absolutely necessary 
and when more conciliatory efforts have already been made and have failed. 

• See Evan and Freeman 1988 



Werhane's Alliance Approach 

• Werhane's alliance approach is similar to the stakeholder approach in that it recognizes several groups 
that surround the corporation and have vital interests that depend on the doings of the corporation. 
These surrounding groups are more or less the same as those in the stakeholder approach: owners, 
managers, employees, customers, suppliers, local communities, governments, the environment, etc. 

• But Werhane makes two significant departures from the stakeholder approach. First, she uses moral 
imagination to distance the corporation from the problem solving process; the lens of problem solving 
refocuses on each of the other stakeholders. Whereas for stakeholder theory the corporation is the center 
of analysis and is visualized as surrounded by its stakeholders, the alliance approach decentralizes the 
corporation and alternatively visualizes each stakeholder as the center for the purpose of framing 
problems and generating solutions. 



76 CHAPTER 3. CSR (CORPORATE SOCIAL RESPONSIBILITY) 

• Second, the alliance approach sees the corporation as a part of a system of interrelated and interde- 
pendent parts. Hence, each problem situation presents a system formed of the corporation, owners, 
managers, employees, suppliers, customers, local communities, and governments. Problems emerge 
from value conflicts within and between the constituent parts of the system. They are solved through 
the cooperation of the different constituencies of the alliance. 

• While this approach does not lend itself to algorithms or rules, it does promise solutions by highlighting 
and facilitating moral imagination both in the framing of problems (problems are posed in terms of 
framings from multiple perspectives) and in terms of the generation of solutions (multiple problem- 
framings help us to visualize new solution horizons). 

• See Werhane, 2007 and 2008. 



3.3.4 What you will do ... 
Module Activities 

1. Examine the CSR challenges presented above. Compare the two responses to each challenge. 

2. Learn about three models of corporate social responsibility. 

3. Develop a fully articulated social contract between business and society. Use this contract to understand 
the basic CSRs of business corporations. 

4. Prepare a Social Impact Analysis on the fictional firm, Burger Man. 

5. Prepare for and participate in a board meeting for Burger Man to examine ethically its practices and 
develop for it a viable and sustainable program of corporate social responsibility. This requires that 
you give a short presentation on the interests of a particular Burger Man stakeholder 

6. Develop a full blown CSR program for Burger Man that carries out the responsibilities of this company 
to its stakeholders. 



3.3.5 Burger Man Stakeholders 

The author became aware of the Burger Man exercise when participating in an Ag-Sat broadcast course in 
Agricultural Ethics in 1992. The exercise was created by the leader of the course, Dr. Paul Thompson. 
Burger Man Profile 

Burger Man is a franchise that began by selling the fast food staples of hamburgers, french fries, and milk 
shakes. As the company has matured and faced other competitors in this market niche, it has, of course, 
developed a more sophisticated set of products and services. But it has also been challenged on various 
issues related to corporate social responsibility. Groups representing the rights and interests of animals 
have criticized the agribusiness methods used by its suppliers. Recently, public interest groups have blamed 
Burger Man and its competitors for encouraging unhealthy dietary habits among its customers and the public 
in general. Shareholders, of course, are concerned that the company continue to be profitable and provide 
them with a good return on investment. Governmental regulatory agencies such as the EPA (Environmental 
Protection Agency) and OSHA (Occupational Safety and Health Administration) wish to hold Burger Man 
accountable for conforming to its regulations. In short there are several stakeholder groups surrounding this 
corporation, each vying for its particular interest. In this exercise, you will play two roles. First you will 
be assigned a role as one of Burger Man's stakeholders and make a presentation of your group's interest 
in mock shareholder meeting that will be held in class. Then you will switch to the role of Burger Man 
management. Here your assignment will be to articulate the different stakeholder interests and integrate 
them into a coherent CSR plan for your company. 

Burger Man Customers 

• Burger Man customers are the consumers who go to its restaurant and enjoy its food services. In 
preparing your board meeting presentation you need to explore Burger Man's social responsibilities to 
its customers. 



77 

• Are these reducible to providing them an enjoyable product at a reasonable price? Or does BM's social 
responsibilities go beyond this? 

• Burger Man has extensive interactions with its suppliers that include meat packing corporations and 
agri-business concerns. How should Burger Man choose its suppliers? How carefully should it monitor 
their activities. To what extent is Burger Man responsible for the untoward activities of these groups? 

• How responsible is Burger Man for shaping the dietary habits of its customers? Does it bear respon- 
sibility for the health problems that its public develops from bad dietary practices? 

Burger Man Shareholders 

• Burger Man shareholders are investors who have purchased shares of Burger Man's publicly traded 
stock. 

• What are their stakes? 

• What are their responsibilities? For example, how closely should shareholders monitor the actions of 
their agents, i.e., Burger Man's managers? Are shareholders responsible for holding Burger Man to 
certain standards of corporate social responsibility? What are these standards and how do they stand 
in relation to the different models of social responsibility? 

• Prepare your presentation around these issues. Address shareholder interests (stakes) and responsibil- 
ities. 

Burger Man Managers 

• Burger Man managers are the agents of the shareholders/owners responsible for overseeing the day-to- 
day operations of the corporation. 

• What are the manager's stakes? What role do they play in the different models of social responsibility? 
(Classical, stakeholder, and alliance views?) 

• Agency theory argues that the primary corporate governance problem is overseeing and controlling the 
actions of managers. How closely should shareholders and their board of directors oversee corporate 
managers? Are managers self-interested agents or stewards of the corporation? 

• What are managerial responsibilities vis a vis corporate social responsibility? Should they uncover 
illegal actions? Should they implement an audit process that assess the corporation's success in carrying 
out its social responsibilities? Should these responsibilities go beyond the legal minimum? 

• Should managers go beyond the legal minimum in monitoring and carrying out corporate social re- 
sponsibilities? 

• Are corporate managers responsible only to shareholders or do their responsibilities extend to other 
stakeholders? If the latter, how do they balance conflicting stakes? 

• Structure your presentation around outlining managerial stakes and roles. Choose a model of corporate 
social responsibility and argue for its appropriateness to Burger Man. 

Government Regulatory Agencies: OSHA and EPA 

• OSHA is in charge of regulating workplace safety. EPA is in charge of setting, monitoring, and enforcing 
standards concerning the environment. (For example, they establish acceptable air emission and water 
discharge standards.) 

• What are the stakes of government regulatory agencies? What is their role in the context of the Burger 
Man corporation? 

• Write your position paper outlining your group's stakes and roles in the context of establishing Burger 
Man's corporate social responsibility procedures. What would you recommend? How should you back 
up or enforce these recommendations? 

Animal Rights Activists 

• Burger Man serves hamburgers, chicken sandwiches, and dairy products. These involve animals. As 
animal rights activists, you are concerned with steering Burger Man and its suppliers toward morally 
acceptable treatment of animals. 



78 CHAPTER 3. CSR (CORPORATE SOCIAL RESPONSIBILITY) 

• What are your group's stakes in this board meeting? What kind of role should you play? 

• State your policy on animal treatment? Is it a position of animal welfare based on utilitarian consider- 
ations? (Peter Singer provides such a position.) Is it a deontological position based on the assertion of 
animal rights that impose correlative duties on humans? (Tom Regan takes this position.) Or should 
you base your arguments on anthropocentric issues such as human health? 

• Write a position paper that responds to these questions for presentation in the Burger Man board 
meeting. 

Town X Committee for Economic Development 

• Your town, Town X, has three Burger Man franchises. Representatives from the town council are 
participating in the board meeting in order to ensure that Burger Man's policies on corporate social 
responsibility enhance the town's economic welfare and development. 

• What are your stakes? What are your roles and responsibilities? 

• What kind of services and products do you provide for Burger Man? What benefits do your community 
draw from Burger Man? How can Burger Man activities and policies promote or demote your town's 
interests and stakes? 

• Develop a position paper for the board meeting that addresses these issues? Pay special attention to 
the goods and risks that your town exchanges with Burger Man. 

Insert paragraph text here. 
Exercises in CSR 

• Participate in the Burger Man Stakeholder Meeting 

• Take your assigned stakeholder group and prepare a short presentation (five minutes maximum) on 
your stakeholder's interests, rights, needs, and vulnerabilities. 

• Listen to the stakeholder presentations from the other groups. Try to avoid a competitive stance. 
Instead, look for commonalities and shared interests. You may want to form coalitions with one or 
more of the other groups. 

• Switch from the stakeholder role to that of Burger Man management. You are responsible for developing 
a comprehensive corporate social responsibility program for Burger Man. You job is to integrate the 
concerns expressed by the stakeholders in their presentation and form your plan around this integration. 

• Try to resolve conflicts. If you cannot and are forced to prioritize, then you still must find a way of 
recognizing and responding to each legitimate stakeholder stake. You may want to refer to the "Ethics 
of Team Work" module (ml3760) to look for time-tested methods for dealing with difficult to reconcile 
stake. These include setting quotas, negotiating interests, expanding the pie, nonspecific compensation, 
logrolling, cost-cutting and bridging. You should be able to establish beyond a shadow of a doubt that 
you have made every attempt to recognize and integrate every legitimate stakeholder stake. 

3.3.6 What did you learn? 

This module and two others (A Short History of the Corporation and Corporate Governance) are designed to 
help you understand the corporate context of business. In this section, you should reflect on three questions: 
(1) What have you learned about the social responsibilities of corporations? (2) What still perplexes you 
about the social responsibilities of corporations. (3) Do you find one model of CSR better than the others? 
(4) Can these models of CSR be combined in any way? 



79 
3.3.7 Appendix 

Rubric for Partial Exam on CSR 

This media object is a downloadable file. Please view or download it at 
<PE_Rubric_CLSR_F08.docx> 

Figure 3.4: This file contains the rubric to be used on the partial exam for Corporate Leadership and 
Social Responsibility, ADMI 3405, Fall 2008" 



Corporate Social Responsibility Frameworks: Seminal Papers 

1. Friedman, M. (1970) "The Social Responsibility of Business Is to Increase Its Profits," in New York 
Times Magazine, September 13, 1970. 

2. Evan, W.M. and Freeman, E. (1988) A Stakeholder Theory of the Modern Corporation: Kantian 
Capitalism" in Beauchamp and Bowie 1988. 

3. Friedman 1970 and Evan and Freeman 1988 can be found in: Beauchamp, T.L. and Bowie, N.E., 
editors. (1988) Ethical Theory and Business, 3rd Edition. New Jersey: Prentice Hall: 87-91 and 
97-106. 

4. See Werhane 2007 and 2008 below 

References 

1. Collins, J.C., Porras, J. I. (1994) Built To Last: Successful Habits of Visionary Companies. 

New York: Harper Collins Publishers. 

2. Stone, C. D. (1975) Where the Law Ends: The Social Control of Corporate Behavior. Prospectr 
Heights, IL: Waveland Press, INC: 1-30. 

3. Des Jardins, J.R. (1993) Environmental Ethics: An Introduction to Environmental Philosophy. Bel- 
mont, CA: Wadsworth Publishing Company: 37. 

4. Clarke, T. (2004) "Introduction: Theories of Governance-Reconceptualizing Corporate Governance 
Theory After the Enron Experience," in Theories of Corporate Governance: The Philosophical Foun- 
dations of Corporate Governance, ed. Thomas Clarke. New York: Routledge: 1-30. 

5. Donaldson, T. (1993) The Ethics of International Business. New York: Oxford University Press. 

6. French, P.A. (1984) Collective and Corporate Responsibility. New York: Columbia University Press. 

7. French, P.A. (1997) "Corporate Moral Agency" in Werhane, P.H., and Freeman, R.E. Blackwell Ency- 
clopedic Dictionary of Business Ethics. Oxford, UK: Blackwell: 148-151. 

8. May, L. (1987) The Morality of Groups: Collective Responsibility, Group-Based Harm, and Corporate 
Rights. Notre Dame, IN: University of Notre Dame Press. 

9. Werhane, P. H. (2008) "Mental Models: Moral Imagination and System Thinking in the Age of Glob- 
alization," in Journal of Business Ethics, 78: 463-474. 

10. Werhane, P. (2007) "Corporate Social Responsibility/Corporate Moral Responsibility: Is There a 
Difference and the Difference It Makes," in eds., May, S., Cheney, G., and Roper, J., The Debate over 
Corporate Social Responsibility. Oxford, UK: Oxford University Press: 459-474. 

11. Fisse, B. and French, P.A., eds. (1985) Corrigible Corporations and Unruly Law. San Antonio, TX: 
Trinity University Press. 

12. Nader, R. and Green, M.J., eds. (1973) Corporate Power in America. New York: Grossman. 

13. Nader,, R. Green, M. and Seligman, J. (1976) Taming the Giant Corporation. New York: Norton. 

14. Davis, M. (1998) Thinking Like an Engineer: Studies in the Ethics of a Profession. Oxford, UK: 
Oxford University Press: 119-156. Jackall, R. (1988) Moral Mazes: The World of Corporate Managers. 
Oxford, UK: Oxford University Press. 



80 CHAPTER 3. CSR (CORPORATE SOCIAL RESPONSIBILITY) 

15. Carol, A. B., "Social Responsibility," in Werhane, P., and Freeman, R. E., eds. (1997, 1998) Blackwell 
Encyclopedic Dictionary of Business Ethics. Oxford, UK: Blackwell Publishers, INC: 593-595. 

16. Dyrud, M.A. (2007) "Ethics, Gaming, and Industrial Training," in IEEE Technology and Society 
Magazine. Winter 2007: 36-44. 

17. Ritz, Dean. (2007) "Can Corporate Personhood Be Socially Responsible?" in eds. May, S., Cheney, 
G., and Roper, J., Corporate Governance. Oxford, UK: Oxford University Press: 194-195. 

3.3.8 EAC ToolKit Project 

3.3.8.1 This module is a WORK-IN-PROGRESS; the author(s) may update the content as 
needed. Others are welcome to use this module or create a new derived module. You can 
COLLABORATE to improve this module by providing suggestions and/or feedback on your 
experiences with this module. 

Please see the Creative Commons License 6 regarding permission to reuse this material. 

3.3.8.2 Funded by the National Science Foundation: "Collaborative Development of Ethics 
Across the Curriculum Resources and Sharing of Best Practices," NSF-SES-0551779 

3.4 Theory Building Activities: "Responsibility and Incident at 
Morales" 7 

3.4.1 Module Introduction 

3.4.1.1 Getting Started... 

Manuel, plant manager at the Phaust chemical plant in Morales, Mexico, has just died. While he was 
babysitting the process of manufacturing Phaust's new paint remover (monitoring on site temperature and 
pressure conditions) an explosion occurred that killed him instantly. The Mexican government has formed 
an independent commission to investigate this industrial accident. 

This commission (headed by your instructor) has ordered key participants to testify on their role in the 
accident in a public hearing. Your job is to present before this commission from a stakeholder point of view. 
You will be divided into groups to role play the following stakeholder perspectives: 



Fred, the chief engineer involved in designing the plant, 

plant workers, 

officials from Mexican government regulatory agencies, 

Phaust management, 

representatives from the parent French company, 

officials presiding over an engineering professional society. 



You will be assigned roles and given class time to prepare presentations for the commission. Then the class 
will enact the public hearing by having each group give a presentation from the perspective of its assigned 
role. Following these presentations, groups will answer questions from the investigating commission. Finally, 
you will work through debriefing activities to help solidify your practical understanding of the module's 
chief concepts. Background materials designed to help you with your presentations include sketches of moral 
responsibility, links to the "Incident at Morales" Case, tasks to help structure your role-playing, and activities 
to debrief on this exercise. This module is designed to help you learn about moral responsibility by using 
responsibility frameworks to make day-to-day decisions in a realistic, dynamic, business context. 



6 http://creativecommons.org/licenses/by/2.0/ 

7 This content is available online at <http://cnx.Org/content/ml5627/l.5/>. 



81 

3.4.1.1.1 Before You Come to Class... 

1. Visit the link to the National Institute for Engineering Ethics. Look at the study guide and download 
the script for the video, "Incident at Morales." You want to have some idea of what happens in the 
video before you watch it. 

2. Read the module. Pay special attention to the section on "What you need to know." Here you will 
read summaries of three senses of moral responsibility: blame responsibility, sharing responsibility, 
and responsibility as a virtue. Your goal here is not to understand everything you read but to have a 
general sense of the nature of moral responsibility, the structure of the responsibility frameworks you 
will be using in this module, and the difference between moral and legal responsibility. Having this 
background will get you ready to learn about moral responsibility by actually practicing it. 

3. Come to class ready to watch the video and start preparing for your part in the public hearing. It is 
essential that you attend all four of these classes. Missing out on a class will create a significant gap 
in your knowledge about and understanding of moral responsibility. 



3.4,2 What you need to know... 

"Responsibility" is used in several distinct ways that fall under two broad categories, the reactive and the 
proactive. Reactive uses of responsibility refer back to the past and respond to what has already occurred. 
(Who can be praised or blamed for what has occurred?) Proactive uses emerge through the effort to extend 
control over what happens in the future. An important part of extending control, knowledge, and power 
over the future is learning from the past, especially from past mistakes. But proactive responsibility also 
moves beyond prevention to bringing about the exemplary. How do occupational and professional specialists 
uncover and exploit opportunities to realize value in their work? Proactive responsibility (responsibility as a 
virtue) explores the skills, sensitivities, motives, and attitudes that come together to bring about excellence. 

3.4.2.1 Different meanings of Responsibility 
Reactive Senses 

1. Causal Responsibility refers to prior events (called causes) which produce or prevent subsequent 
events (called effects). Cheap, inacurate sensors (cause) required that Manual be present on the scene 
(effect) to monitor the high temperatures and pressures required to correctly prepare Phaust's paint 
stripper. 

2. Role Responsibility delineates the obligations individuals create when they commit to a social or 
professional role. When Fred became an engineer he committed to holding paramount the health, 
safety and welfare of the public. (See NSPE code of ethics) 

3. Capacity Responsibility sets forth those conditions under which someone can be praised or blamed 
for their actions. Praise and blame associate an agent with an action. Excuses are based on means for 
separating or disassociating an agent from their actions. Capacity responsibility helps us determine 
whether there are any legitimate excuses available for those who would disassociate themselves from 
untoward, harm-causing actions. 

4. Blame Responsibility determines when we can legitimately praise or blame individuals for their 
actions. 

Proactive Senses 

1. Sharing Responsibility extends the sphere of responsibility to include those to whom one stands in 
internal relations or relations of solidarity. Shared responsibility includes answering for the actions of 
others within one's group. It also includes coming to the moral aid of those within one's group who 
have gone morally astray; this involves bringing to their attention morally risky actions and standing 
with them when they are pressured for trying to uphold group values. While sharing responsibility 



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CHAPTER 3. CSR (CORPORATE SOCIAL RESPONSIBILITY) 



entails answering for what members of one's group have done, it does not extend to taking the blame 
for the untoward actions of colleagues. Sharing responsibility does not commit what H.D. Lewis calls 
the "barbarism of collective responsibility" which consists of blaming and punishing innocent persons 
for the guilty actions of those with whom they are associated. 

2. Preventive Responsibility: By using knowledge of the past, one can avoid errors or repeat successes 
in the future. Peter French calls this the "Principle of Responsive Adjustment." (One adjusts future 
actions in response to what one has learned from the past.) According to French, responsive adjustment 
is a moral imperative. If one fails to responsively adjust to avoid the repetition of past untoward results, 
this loops back into the past and causes a revaluation of the initial unintentional action. The benefit 
of the doubt is withdrawn and the individual who fails to responsively adjust is now held responsible 
for the original past action. This is because the failure to adjust inserts the initial action into a larger 
context of negligence, bad intentions, recklessness, and carelessness. Failure to responsively adjust 
triggers a retroactive attribution of blame. 

3. Responsibility as a Virtue: Here one develops skills, acquires professional knowledge, cultivitates 
sensitivies and emotions, and develops habits of execution that consistently bring about value realiza- 
tion and excellence. One way of getting at responsibility as an excellence it to reinterpret the conditions 
of imputability of blame responsibility. An agent escapes blame by restricting the scope of role respon- 
sibility, claiming ignorance, and citing lack of power and control. In responsibility as a virtue, one goes 
beyond blame by extending the range of role responsibilities, seeking situation-relevant knowledge, and 
working to skillfully extending power and control. 

3.4.2.2 Blame Responsibility 

To hold Fred responsible for the accident at Morales, we need to... 

1. Specify his role responsibilities and determine whether he carried them out 

2. Identify situation-based factors that limited his ability to execute his role responsibilities (These are 
factors that compel our actions or contribute to our ignorance of crucial features of the situation.) 

3. Determine if there is any moral fault present in the situation. For example, did Fred act on the basis 
of wrongful intention (Did he intend to harm Manuel by sabotaging the plant?), fail to exercise due 
care, exhibit negligence or recklessness? 

4. If Fred (a) failed to carry out any of his role responsibilities, (b) this failure contributed to the accident, 
and (c) Fred can offer no morally legitimate excuse to get himself off the hook, then Fred is blameworthy. 

Fred, and other Incident at Morales stakeholders, can escape or minimize blame by establishing morally 
legitimate excuses. The following table associates common excuses with the formal conditions of imputability 
of blame responsibility. (Conditions of imputability are those conditions that allow us to associate an action 
with an agent for purposes of moral evaluation.) 



Excuse Table 



Excuse Source (Capacity Responsibility) 



Excuse Statement 



Conflicts within a role responsibility and be- 
tween different role responsibilities 



I cannot, at the same time, carry out all my con- 
flicting role responsibilities 



continued on next page 



83 



Hostile Organizational Environment which 
routinely subordinates ethical to financial consid- 
erations. 


The environment in which I work makes it impos- 
sible to act responsibly. My supervisor routinely 
overrules my professional judgment, and I can do 
nothing about it. 


Overly determining situational constraints: finan- 
cial and time 


I lack the time and money to carry out my respon- 
sibility. 


Overly determining situational constraints: techni- 
cal and manufacturing 


Carrying out my responsibility goes beyond techni- 
cal or manufacturing limits. 


Overly determining situational constraints: per- 
sonal, social, legal, and political. 


Personal, social, legal or political obstacles prevent 
me from carrying out my responsibilities. 


Knowledge Limitations 


Crucial facts about the situation were kept from me 
or could not be uncovered given even a reasonable 
effort. 



Table 3.6 



3.4.2.3 Proactive Responsibility 

Preventive Responsibility: Responsive Adjustment 

• Responsibility to adjust future actions in response to what has been learned from the past 

• Scenario One: Past actions that have led to untoward results. Failure here to adjust future actions to 
avoid repetition of untoward results leads to reassessing the original action and retrospectively blaming 
the agent. 

• Scenario Two: Past actions have unintentionally and accidentally led to positive, value-realizing 
results. Here the agent responsively adjusts by being prepared to take advantage of being lucky. The 
agent adjusts future actions to repeat past successes. In this way, the agent captures past actions (past 
luck) and inserts them into the scope of praise. 

• Nota Bene: The principle of responsible adjustment sets the foundation for responsibility in the sense 
of prevention of the untoward. 



Responsibility as a Virtue or Excellence 

1. Virtues are excellences of the character which are revealed by our actions, perceptions, beliefs, and 
attitudes. Along these lines, responsibility as a virtue requires that we reformulate responsibility 
from its reactive, minimalist sense (where it derives much of its content from legal responsibility) to 
responsibility as an excellence of character. 

2. Aristotle situates virtues as means between extremes of excess and defect. Can you think of examples of 
too much responsibility? (Does Fred try to take on too much responsibility in certain situations?) Can 
you think of anyone who exhibits too little responsibility. (Does Fred take on too little responsibility 
or shift responsibility to others?) For Aristotle, we can have too much or too little of a good thing. 
From the "too much" we derive vices of excess, from the"too little" we derive the vices of defect. 

3. Virtues are more than just modes of reasoning and thinking. They also consist of emotions that clue 
us into aspects of the situation before us that are morally salient and, therefore, worthy of our notice 
and response. Two emotions important for responsibility are care and compassion. Care clues us into 
aspects of our situation that could harm those who depend on our actions and vigilance. Do Wally 
and Fred pay sufficient attention to the early batch leakages in the Morales plant? If not, does this 
stem from a lack of care ("Let operations handle it") and a lack of compassion ("Manuel can take care 
of himself")? Care and compassion help to sensitize us to what is morally salient in the situation at 
hand. They also motivate us to act responsibility on the basis of this sensitivity. 



84 



CHAPTER 3. CSR (CORPORATE SOCIAL RESPONSIBILITY) 



4. Responsibility as a virtue manifests itself in a willingness to pick up where others have left off. After 
the Bhopal disaster, a worker was asked why, when he saw a cut-off valve open, he didn't immediately 
close it as safety procedures required. His response was that shutting off the value was not a part of 
his job but, instead, the job of those working the next shift. This restriction of responsibility to what 
is one's job creates responsibility gaps through which accidents and other harms rise to the surface. 
The worker's lack of action may not constitute moral fault but it surely signifies lack of responsibility 
as a virtue because it indicates a deficiency of care and compassion. Those who practice responsibility 
as a virtue or excellence move quickly to fill responsibility gaps left by others even if these tasks are 
not a part of their own role responsibilities strictly defined. Escaping blame requires narrowing the 
range of one's role responsibilities while practicing responsibility as a virtue often requires effectively 
expanding it. 

5. Finally, responsibility as an excellence requires extending the range of knowledge and control that one 
exercises in a situation. Preventing accidents requires collecting knowledge about a system even after 
it has left the design and manufacturing stages and entered its operational life. Responsibility requires 
that we search out and correct conditions that could, under the right circumstances, produce harmful 
accidents. Moreover, responsibility is a function of power and control. Extending these and directing 
them toward good results are clear signs of responsibility as a virtue. 

Reponsibility as Virtue 

• The Incident at Morales provides us with a look into a fictionalized disaster. But, if it is examined 
more carefully, it also shows opportunities for the exercise of responsibility as a virtue. The following 
table will help you to identify these "responsibility opportunities" and allow you to imagine counbter- 
factuals where had individuals acted otherwise the "incident" could have been avoided and moral value 
could have been realized. 

• Think of virtuous or even heroic interventions that could have prevented the accident. These represents, 
from the standpoint of the film, lost opportunities for realizing responsibility and other virtues. 



Responsibility as a Virtue: Recovering Lost Opportunities 



Characteristic 


Relevance to Incident at Morales 


Change goal from avoiding blame to pursuing pro- 
fessional excellence. 


Could this have led participants to look for more 
creative responses to EPA environmental regula- 
tions? 


Develop a flexible conception of your role responsi- 
bilities and move quickly to extend it to fill respon- 
sibility gaps left by others. 


Could this have structured differently the re- 
lation between those responsible for plant de- 
sign/construction and those responsible for its op- 
eration? 


Extend the scope and depth of your situational 
knowledge, especially regarding accumulating infor- 
mation on the operational history of newly imple- 
mented technologies. 


Would this have led to further follow-up on the early 
signs of leakage of the couplings? 


continued on next page 



85 



Extend control and power. This includes finding 
ways of more effectively communicating and advo- 
cating ethical and professional standards in the con- 
text of group-based decision-making. 



Could Fred have handled more proactively the last 
minute change in the chemical formulation of the 
paint remover? 



Table 3.7 

Section Conclusion 

Integrate the retroactive and proactive senses of responsibility into your group's presentation for the public 
hearing. Don't just work on the reactive approach, i.e., try to avoid blame and cast it on the other stakeholder 
groups. Think proactively on how to prevent future problems, respond to this accident, and turn the events 
into positive opportunities to realize value. 

Questions to Get Started 

• Is Fred (blame) responsible for the accident and even Manuel's death? (Use the conditions of im- 
putability and the excuse table to get started on this question.) 

• Did Wally and Chuck evade their responsibility by delegating key problems and decisions to those, like 
plant manager Manuel, in charge of operations? (Start the answer to this question by determining the 
different role responsibilities of the stakeholders in this situation.) 

• What kind of responsibility does the parent French company bear for shifting funds away from Phaust's 
new plant to finance further acquisitions and mergers? (Looking at the modules on corporate social 
responsibility and corporate governance will help you to frame this in terms of corporate responsibility.) 

• Do engineering professional societies share responsibility with Fred? (The CIAPR and NSPE codes 
of ethics will help here. Try benchmarking corporate codes of ethics to see if they provide anything 
relevant. 

• Look at the positive, proactive moral responsibilities of professional societies. What can they do to 
provide moral support for engineers facing problems similar to those Fred faces? Think less in terms 
of blame and more in terms of prevention and value realization. 



3.4,3 Presentation on Moral Responsibility 

[Media Object] 8 



3.4,4 What you are going to do... 
In this module, you will... 

1. apply and integrate the concept of moral repsonsibility (blame responsibility, sharing responsibility, 
responsibility as a virtue) to situations that arise in the video, "Incident at Morales." 

2. learn the basic facts, character profiles, and decision-situations portrayed in the video, "Incident at 
Morales." You will see the video in class and examine the script and Study Guide at the NIEE website. 

3. work in groups to develop and play a stakeholder role in a fictional public hearing. Your group's 
specific tasks are outlined below in one of the group profiles provided. In general, you will prepare 
a statement advancing your group's interests and points of view. The responsibility frameworks will 
help you anticipate questions, prepare responses, and defend your role against those in other roles who 
may try to shift the blame your way. But most important, this module provides tools to help you go 
beyond the reactive, blame standpoint. 

4. participate in a mock public hearing by playing out your group's assigned role. 



8 This media object is a downloadable file. Please view or download it at 
<Moral Responsibility.pptx> 



86 CHAPTER 3. CSR (CORPORATE SOCIAL RESPONSIBILITY) 

5. work with the other groups to debrief on this activity. The public hearing will generate a lot of 
information, ideas, and positions. Debriefing will help you to structure and summarize this material. 
The objective here is to learn by doing. But to truly learn from what you have done, you need to 
reflect carefully. 

3.4.4.1 Stakeholder Roles 

Mexican Government Regulatory Agencies 

• Look at OSHA regulations on safety. Do any of these apply to the incident at morales. Pay particular 
attendion to responsibilities for providing safe working conditions and to mandated procedures for 
accident prevention. How as a government agency can you encourage companies to take active and 
positive measures to increase workplace safety and prevent accidents? 

• Look at EPA or JCA for ideas on environmental issues. What are Phaust's responsibilities regarding 
local environmental conditions? (Should the Mexican government require lining waste water ponds?) 

• As an official representing Mexican government regulatory agencies, how do you balance the safety and 
environmental needs of Mexican citizens and workers with the need to attract foreign companies and 
investors to Mexico to promote economic development. Should safety and environmental values ever 
be traded off to promote economic development? 

Workers at Morales Plant 

• Manuel, your plant manager, has just died. You and your co-workers are concerned about the safety 
of this new plant. Can you think of any other issues that may be of concern here? 

• Develop a statement that summarizes your interests, concerns, and rights. Are these being addressed 
by those at Phaust and the parent company in France? 

• The Mexican Commission established to investigate this "incident" will ask you questions to help 
determine what cause it and who is to blame. What do you think some of these questions will be? 
How should you respond to them? Who do you think is to blame for the incident and what should be 
done in response? 

Designing Engineer: Fred 

• Examine Fred's actions and participation from the standpoint of the three responsibilty frameworks 
mentioned above. 

• Develop a two minute position paper summarizing Fred's interests, concerns, and rights. 

• Anticipate questions that the Commission might raise about Fred's position and develop proactive and 
effective responses.. 

• Be sure to use the three responsibility frameworks. Is Fred to blame for what happened? In what 
way? What can professional societies do to provide moral support to members in difficult situations? 
How can interested parties provide moral support? Finally, what opportunities arose in the video 
practicing moral responsibility as a virtue? (Think about what an exemplary engineer would have 
done differently.) 

Phaust Management: Wally and Chuck 

• Chuck and Walley made several decisions reponding to the parent company's budget cuts that placed 
Fred under tight constraints. Identify these decisions, determine whether there were viable alternatives, 
and decide whether to justify, excuse, or explain your decisions. 

• Develop a two minute position paper that you will present to the commission. 

• Anticipate Commission questions into your responsibility and develop effective responses to possible 
attempts by other groups to shift the blame your way. 



87 

Corporate Governance: French Parent Company 

• You represent the French owners who have recently required Phaust Chemical. You have recently 
shifted funds from Phaust operations to finance further mergers and acquisitions for your company. 

• What are your supervisory responsibilities in relation to Phaust? 

• Develop a preliminary two minute presentation summarizing your position and interests. 

• Anticipate likely commission questions along with possible attempts by other groups to shift the blame 
your way. 

Engineering Professional Society 

• You represent the professional engineering society to which Fred belongs. 

• Develop a two minute presentation that outlines your group's interests and position. 

• Anticipate possible Commission questions, develop responses, and anticipate attempts by other groups 
to shift the blame your way. 

• Respond to whether your professional society should extend moral support to engineers in difficult 
positions like Fred's. Should they clarify code provisions? Provide legal support and counseling? Make 
available a professional/ethical support hotline? 

Investigative Commission 

This role will be played by your instructor and other "guests" to the classroom. Try to anticipate the 
commissions questions. These will be based on the conditions of blame responsibility, the principle of 
responsive adjustment, and responsibility as a virtue. 

3.4.4.2 Module Time Line 

• Module Preparation Activities: Read module and visit niee.org to get general orientation to "Incident 
at Morales" 

• Class One: Watch Video. Receive group role. Begin preparing your group role. 

• Class Two: Work within your group on preparing your group's statement, anticipating questions, and 
developing responses. 

• Class Three: Participate in the Public Hearing. The group representing the Mexican Commission 
will convene the public hearing, listen to the group's statements, ask questions, and prepare a brief 
presentation on the Commission's findings 

• Class four: Class will debrief on the previous class's public hearing. This will begin with the Com- 
mission's findings 



3.4,5 What have you learned? 

Listen to the findings of the Mexican Government Commision. Write a short essay responding 
to the following questions. Be prepared to read parts of your essay to your professor and to 
your classmates. 

1. Do you agree with the Commissions findings? Why or why not? Be sure to frame your arguments in 
terms of the responsibility frameworks provided above. 

2. Were there any opportunities to offer Fred moral support by those who shared responsibility with him? 
What were these opportunities. How, in general, can professional societies support their members 
when they find themselves in ethically difficult situations? 

3. What opportunities arise for exercising resonsibility as an excellence? Which were taken advantage of? 
Which were lost? 

4. Finally, quickly list themes and issues that were left out of the public hearing that should have been 
included? 



88 CHAPTER 3. CSR (CORPORATE SOCIAL RESPONSIBILITY) 

References 

1. F. H. Bradley (1962) Ethical Studies, Essay I. Oxford, UK: Oxford University Press. 

2. Herbert Fingarette. (1967) On Responsibility. New York: Basic Books, INC: 3-16. 

3. Larry May (1992) Sharing Responsibility. Chicago: University of Chicago Press. 

4. Larry May (1996) The Socially Responsive Self: Social Theory and Professional Ethics. Chicago: 
University of Chicago Press: 28-46. 

5. Michael Pritchard (2006) Professional Integrity: Thinking Ethically. Lawrence, KS: University of 
Kansas Press. 

6. Lawrence Blum (1994) Moral Perception and Particularity. Cambridge, UK: Cambridge University 
Press: 30-61 

7. Aristotle. Nichomachean Ethics, Book 3, Chapters 1-3. 

8. Edmund L. Pincoffs (1986) Quandaries and Virtues: Against Reductivism in Ethics. Lawrence, KS: 
University of Kansas Press. 

9. W.H. Walsh (1970) "Pride, Shame and Responsibility," The Philosophical Quarterly, Vol 20, no 78, 
January 1970: 1-13. 

10. Albert Flores and Deborah G. Johnson (1983) "Collective Responsibility and Professional Roles" in 
Ethics April 1983: 537-545. 



3.5 Ethical Issues in Risk Management for Business 9 

note: These links will help you to explore different topics related to this module's contents. 

- Epidemological studies are "natural" experiments. But allowing 
naturally occurring harms to continue without abatement and withholding 
information from risk bearers creates serious ethical problems. 
Read the Tuskegee case as presented at the Western Michigan University 
Ethics Center to learn about a nororious case in which 
patient rights were egregiously violated for the sake of "continuing 
the experiment . " 

- Risk has meaning only in relation to the socio-technical system 
in which it operates. Click on the link above to find out more 
about STS analysis and how it can be used to anticipate problems. 

- Informed consent is a fundament right in the responsible 
management of risk. Click on the link to the Belmont Report to 
find out more about this right and its historical importance. 

- The Online Ethics Center's definition of informed consent 
includes the conditions necessary for fulfilling this right. 



9 This content is available online at <http://cnx.Org/content/ml9085/l.l/>. 



89 



Word Version of this Template 



This is an unsupported media type. To view, please see http://cnx.org/content/ml9085/latest/ EAC TK 

STD TEMPLATE.doc 



Figure 3.5: This is an example of an embedded link. (Go to "Files" tab to delete this file and replace 
it with your own files.) 



3.5.1 Introduction 

Tilting at Windmills in Puerto Rico 

The company, Windmar, has purchased land adjacent to the Bosque Seco de Guanica in Puerto Rico. Their 
plan is to build a small windmill farm to generate electricity that can be sold to the public utility, the 
Autoridad de Energia Electrica. Windmill technology is considered desirable because wind is an abundant, 
clean, and renewable resource. But local opposition has stalled this effort. Concerned citizens object, first 
of all, to being excluded from the public hearings that were held to assess Windmar's windmill project. 
Opponents also claim that windmill technology can kill birds on the endangered species list and damage the 
fragile ecosystems protected in the Boseque Seco de Guanica, an important nature preserve in Puerto Rico. 
They also suspect that the windmill project has the ulterior motive of attracting industrial development 
into southern Puerto Rico. What risks accompany windmill technology, and how can they be dealt with 
ethically? 

The real price of cell phones 

Recently, a series of microwave antennas have been built in Puerto Rico in the Atalaya hills between the 
western cities of Mayaguez and Moca. Different kinds of antennas serve different purposes; some provide 
citizens with cell phone service while others make it possible to track hurricanes and other weather devel- 
opments. The problem is the impact on the people who live in the surrounding areas. Many antennas have 
been built within five hundred yards of private residences with some as close as one hundred yards. Local 
residents were not consulted when the decision was made to build them. They claim that they have suffered 
a disproportionate number of health problems caused by the EMFs (electro-magnetic fields) generated by 
the antennas. Construction and repair activities occur at all hours, day and night, disrupting sleep and 
other normal activities. How should the cell phone companies, government agencies, and other stakeholders 
respond to these health and safety concerns? How should the possible risks to health and safety associated 
with antennas be assessed and communicated? 
No Copper Mines in Puerto Rico 

Starting in the mid-1950's, several international mining companies have attempted to receive permission from 
the Puerto Rican government to construct mines for gold and copper. Orebodies located in the mountainous 
central region of the island, have attracted several proposals for mining projects ranging from large to small 
scale. Concerns about water pollution (produced by tailings or mining waste products), air pollution 
(accompanying the proposed copper smelting plants), and disruption of the agrarian lifestyle still alive 
in central Puerto Rico became focused into considerable political and environmental opposition. Several 
mining proposals were defeated as citizens' interest groups formed and intensively lobbied the government 
not to permit mining. One mining site, located in the Cala Abajo region, has been reclassified as a nature 
preserve to block further attempts at mining. Mining could benefit the areas around the proposed mining 
sites by generating much needed jobs and tax revenue. But these benefits come accompanied by increased 



90 CHAPTER 3. CSR (CORPORATE SOCIAL RESPONSIBILITY) 

risks to the environment as well as public safety and health. How should these risks be assessed? Under 
what conditions, if any, could they be deemed acceptable? What processes should be set into place by the 
government to ensure adequate public participation in determining whether these risks are acceptable? How 
should risk information be communicated to a public which is isolated and still largely illiterate? 
"No" to the Coal Plant 

In the early to mid-1990's, a consortium of U.S. and Spanish power generation companies proposed an 
electricity-generating plant for the Mayaguez area that employed co-generation technology fueled by coal. 
Not only would this privately owned plant sell the electricity it produced to the Autoridad de Energia de 
Electrica; it would also sell the steam by-product to the two local tuna canning plants that had been operating 
in the area since the 1960s. But local opposition arose to derail the project. Coal is a non-renewable resource 
that produces noxious by-products that contribute to acid rain and global warming. Geologists pointed out 
that the plant would be located dangerously close to an active earthquake fault. Environmental groups 
raised concerns about water pollution, especially further deterioration of the already endangered coral reef 
in the Mayaguez Bay due to the discharge of the heated water employed to cool the components of the 
proposed plant. In televised public hearings, company engineers testified on design modifications to keep 
endangered species such as manatee from being sucked into the plant through water intake pipes. On the 
other side of the debate, the Puerto Rico energy utility, the Authoridad de Energia Electrica, predicted 
energy shortages beginning around the year 2000. (These warnings have been vindicated by the frequent 
brown-outs and black-outs that residents currently suffer through.) They also argued that the western part 
of the island needed its own energy-generating facilities to hold onto crucial industries like the textile and 
tuna canning plants located in the area. Finally, they turned to the use of coal to generate electricity as an 
effective substitute for petroleum which is used to generate most of the electricity used by Puerto Ricans. 
Since the rejection of the project, the textile industry has all but disappeared and one of the two tuna 
canning plants has relocated to Taiwan. Can government play the role of "honest broker" between private 
industry and a suspicious public? Should public utilities contract with private industry to meet energy and 
other infrastructure needs? What are the environmental risks of co-generating technology? How can these 
be responsibly communicated to the public? How should all stakeholders weigh environmental, safety, and 
health risks against infrastructure expansion and economic development? 
Ethical Issues in Risk Management for Business 

Each of these cases raises risk issues that cannot be settled by process alone but require substantive debate 
focusing on the fragile ethical values embedded in the surrounding socio-technical system. The stakeholders 
have at times worked together but more often engage in conflict over seemingly incompatible yet essential 
interests. Private industry has designed these projects to respond to real, market-based needs. For example, 
Puerto Rico desparately needs clean, renewable and sustainable sources of energy to protect its fragile 
environment and reduce its dependency on foreign oil. Yet other stakeholders, especially a public with 
complex and vital interests, have banded together to oppose these and other initiatives. Local residents 
demand a right to a livable environment, raise health and safety concerns, and assert civil rights based on 
distributive justice, free and informed consent, and due process. Past experiences with ambitious but poorly 
designed and executed business and government projects have consumed social capital and undermined public 
trust. Continuing development under these conditions has proven difficult. The Puerto Rican government 
has consistently been in the middle attempting to mediate between these contending parties. Can government 
play the role of "honest broker" and help lead conflicting stakeholders to political and social consensus? Can 
government lead the substantive ethical debate into applications of distributive justice, informed consent, 
and sustainable environmental value? Or should it step out of the way and let the public and private industry 
fight it out on their own? What role do free (or semi-controlled) markets have to play in mediating this 
conflict? This module will help you explore these problems through the prism of risk. You will study the 
different aspects of risk and learn about their ethical and social implications. The final objective is to help 
you manage risk ethically through responsible assessment, perception and communication. 



91 

3.5.2 What you need to know . . . 

Working responsibly with risk requires careful integration of substantive ethical issues, distinguishing different 
senses of risk, and mastering the skills required in morally responsible risk communication. In other words, it 
is more than just implementing a mechanical process that imposes unwanted consensus on disparate groups 
and individuals. (See Sandel for an argument that past ethical controversies such as slavery had to be 
settled by means of substantive debates rather than procedural maneuvers.) Ethics is important to risk 
because scientific risk assessment is value-laden. Values permeate decisions such as choice of method as well 
as decisions on how to distribute the burden implied by the uncertainty involved in risk assessment and 
management. This section will introduce you to basic moral concepts involved in risk and offer information 
on how risk is assessed, managed, perceived, and communicated. 

Responsible Risk Management: Associated Basic Moral Concepts 

1. Right: A capacity of action that others are obliged to recognize and respect. A key right in the context 
of risk is free and informed consent. (See below) 

2. Duty: The obligation to recognize and respect the essential capacities of actions of others. Duties are 
correlative to rights. For example, the duty to avoid paternalism in the management and communica- 
tion of risk is correlative to the right of free and informed consent. 

3. Virtue: Responsible risk management can also be formulated as a virtue. Virtues are traits that extend 
"deep down" into an individual's character. They include an orientation toward excellence in decision 
and execution, perceptual sensitivities that help to uncover moral relevance, and emotions/attitudes 
that help motivate decisions and actions oriented toward achieving excellence. For example, a respon- 
sible risk communicator has curiosity that drives understanding and appreciating risk, a concern for 
the well being of the risk bearer, and a strong desire to communicate risk information truthfully and 
clearly. 

4. Justice: Justice can be generally defined as giving each his or her due. Distributive justice, in 
the context of risk, prescribes a fair distribution of the benefits and harms associated with taking 
a certain risk. Ideal pattern approaches argue that distribution should conform to a pattern such 
as equality (equal shares to everyone), need (greatest share to those with the greatest needs), and 
merit (greatest share to those who demonstrate superior merit). Ideal pattern approaches require 
continual redistribution by government through measures such as a progressive income tax. Historical 
process approaches prefer maintaining current patterns of distribution provided the historical process 
leading to them has been free of force or fraud. Justice in the context of risk lies in determining how 
the benefits and harms associated with risk are distributed, and how the uncertainty that permeates 
the risk assessment and management process is distributed among those involved. 

5. Responsibility: Herbert Fingarette defines responsibility (in the context of criminal insanity) as 
(moral) response to (moral) relevance. Different senses of responsibility include causal, legal (vs. 
moral), role, capacity, and blame. Responsibility can be reactive when it focuses on the past and the 
assigning of praise and blame; or it can be proactive when it turns to preventing harm (minimizing 
risk) and realizing value. 

6. Trust: The expectation of moral behavior on the part of others. Trust is built out of the social capital 
accumulated through successful interactions with others. It is consumed or undermined by those who 
choose to free ride on social cooperation, i.e., compete while others are cooperating. The prisoner's 
dilemma (see link above) provides a simplified model to show the fragility of trust (ml7367). 

Key Terms in Risk Practices 

1. Safety: "A thing is safe if, were its risks fully known, those risks would be judged acceptable in light 
of settled value principles." (IEE 108) 

2. Risk: "A risk is the potential that something unwanted and harmful may occur." (IEE 108) 

3. NIMBY: This acronym stands for "Not in my backyard." Citizens often find the risks associated 
with a project or product acceptable only if these are located somewhere else, i.e., in another person's 



92 CHAPTER 3. CSR (CORPORATE SOCIAL RESPONSIBILITY) 

backyard. NIMBY has made it next to impossible for the U.S. DOE (Department of Energy) to find 
an acceptable permanent storage facility for nuclear waste. 

4. Free and Informed Consent: The right to decide if a risk is acceptable based on access to pertinent 
information and absence of compulsion. The Belmont Report defines informed consent in the fol- 
lowing way: "[that] subjects, to the degree that they are capable, be given the opportunity to choose 
what shall or shall not happen to them. This opportunity is provided when adequate standards for 
informed consent are satisfied." The Online Ethics Center spells out conditions necessary for fulfilling 
informed consent: (a) disclosure (of information to the patient/subject); (b) comprehension (by 
the patient /subject of the information being disclosed); (c) voluntariness (of the patient/subject in 
making his/her choice); (d) competence (of the patient /subject to make a decision); and (e) consent 
(by the patient/subject). 

5. Paternalism: Often experts are tempted to act as overly concerned parents and take over the decision- 
making perogatives of the public because they (the experts) "know better." Paternalism, while well 
motivated, is based on the misconception that the public doesn't understand risk because it often 
reaches different conclusions on the acceptability of a given risk than the expert. But the public 
often appreciates risk from a broader, richer standpoint, especially if the expert has properly and 
clearly communicated it. As will be seen below, the public perception of risk is rational because it is 
predictable. 

Dimensions of Risk 

• Risk Assessment: The process of determining the degree of risk associated with a certain product 
or process using scientific methods such as epidemological study or animal bioassay. While using 
scientific procedures to gain a measure of exactness, risk assessment still brings with it a remainder of 
uncertainty that cannot be eliminated. A risk assessment issues into two uncertainties, the uncertainty 
as to whether the harm will occur and the uncertainty as to who (out of the many exposed) will be 
harmed. Ethics enters into the picture as stakeholders negotiate how to deal with and distribute this 
uncertainty. Responsible risk practice requires integrating the conflicting values and interests of the 
involved stakeholders in assessing, communicating, perceiving, and managing risk. It also requires a 
basis of trust that is difficult to build up given the diverse players that make up the risk taking and 
bearing situation. 

• Risk Management: The political/social/ethical process of determining if a risk of a certain degree 
is acceptable given the settled value principles generally held in the community of the risk bearers. 
Responsible risk management requires (a) assessing harm through the responsible exercise of scientific 
method and (b) communicating the assessed risk to those likely to bear it. Responsible risk management 
(i) honors rights such as free and informed consent and due process, (ii) avoids conflicts of interests in 
determining and communicating risk, (iii) conscientiously works toward a just distribution of risks and 
benefits, and (iv) avoids paternalism. 

• Risk Perception: How people perceive risk differs from the strict, scientifically determined degree of 
risk. For example, risk perception factors in voluntariness, control, expected benefits, lack of knowledge, 
and dread of adverse consequences in working toward a judgment on the acceptability of a given risk 
by the community of risk bearers. Because the public perceives risk over this broad background 
of scientific, social, political, and ethical factors, it frequently arrives at conclusions at odds with 
judgments reached using strictly scientific methods. Those taking a paternalistic attitude toward the 
public take this difference as evidence of the irrationality of the public and the need for the experts to 
taken things into their own hands. However, the public attitude toward risk is intelligible and rational 
when this broader, risk perception perspective is taken into account. 

• Risk Communication: This dimension focuses on how to communicate risk information to risk 
bearers in order to facilitate distributive justice, free and informed consent, and due process. Respon- 
sible risk communication requires translating scientifically determined information into a non-technical 
vocabulary. Analogies and comparisons help as does the use of concrete language and commonly un- 
derstood images. But improper use of comparisions and analogies confuses the public and undermines 



93 

trust. 

• Public: "those persons whose lack of information, technical knowledge, or time for deliberation renders 
them more or less vulnerable to the powers an engineer wields on behalf of his client or employer" Davis 

Assessing Risk 

• Epidemiological Studies: We are constantly exposed to different risks that have become inherent 
in our socio-technical circumstances. These ongoing, unintentional experiments are exploited through 
epidemiological studies which are designed to measure the correlation between exposure to risk factors 
and the occurrence of harm. For example, are those living close to EMFs (electro-magnetic fields 
generated by technologies like electrical power lines) susceptible to certain harms like leukemia? An 
epidemiological study would compare incidents of this disease occurring in a population exposed to 
EMFs with incidents of this disease occurring in a population, unexposed to EMSs. If there were a 
significant risk ratio (usually set at three times the incidents of the harm in the unexposed, control 
group) then this provides evidence that exposure to EMFs somehow causes leukemia. (Further study 
would be required to confirm this hypothesis and uncover the causal mechanism by which exposure 
produces the harm.) Epidemiological studies are difficult to carry out and are always accompanied 
by uncertainty due to the limitations of the methods employed. Typically, the harm may take years 
to become manifest after exposure. Finding a population stable enough to determine the effects of 
long term exposure is difficult because individuals frequently move from place to place. Such natural 
experiments also bring with them a great deal of "noise"; factors other than EMFs could be causing 
leukemia or EMFs could be interacting with other elements in the environment to cause the harm. 
Finally, there is the Tuskegee factor. In the notorious Tuskegee experiment, doctors refused to treat 
African Americans for syphilis in order to study the long term progression of the disease. Exposing 
a population to a risk factor without informing them of the potential harm in order to gain scientific 
information violates the right of free and informed consent and the duty not to harm. 

• Animal Bioassays: Risk information can often be obtained by exposing animals to the risk factor 
and checking for emerging harms. While useful, animal bioassays are subject to several problems. 
Experimenting on animals raises many of the same ethical concerns as experimenting on humans. 
Utilitarians argue that animals merit moral consideration because they are sentient and can suffer. 
Animal experiments are thus subject to the three Rs: reduce, refine, and avoid replication. (See 
Bernard Rollins) Second, these experiments create two kinds of uncertainty, (a) Projections from 
animal to human physiology can lead researchers astray because of the differences between the two; 
for example, animals are more sensitive to certain harms than humans, (b) Projecting the results from 
intensive short term animal exposure into the long term can also introduce errors and uncertainty. 
Thus, as with epidemiological studies, there are uncertainties inherent in animal bioassays. 

• Risk assessment, while useful, is burdened with uncertainty due to the limits of what we know, what 
we can know, and what we are able to learn within the ethical parameters of human and animal 
experimentation. Crucial ethical issues arise as we decide how to distribute this uncertainty. Do we 
place its burden on the risk taker by continuing with a project until it is proven unsafe and harmful? 
Or do we suspend the activity until it is proven safe and harm-free. The first gives priority to advancing 
risky activities. The second gives priority to public safety and health, even to the point of suspending 
the new activities under question. 

Risk Perception 

• The framework from which the public perceives risk is broader and richer than that of risk assessment. 
The following five factors influence how the public judges the acceptability of a risk assessed at a given 
magnitude. 

• Voluntariness: A risk that is voluntarily taken is more acceptable than a risk of the same magnitude 
that taken involuntarily. Thus, driving one's car to a public hearing on the risks of a proposed nuclear 
power plant may be riskier than living next to the plant. But driving to the public hearings is done 



94 CHAPTER 3. CSR (CORPORATE SOCIAL RESPONSIBILITY) 

voluntarily while living next to the plant is suffered involuntarily. According to studies, a voluntary 
risk is as much as 1000 times more acceptable than an involuntary risk of the same magnitude. 

• Control: Closely related to voluntariness is control. A risk under one's control (or under the control 
of someone trusted) is more acceptable than a risk of the same magnitude that is not under control. 
Charles Perrow, in Normal Accidents argues against nuclear energy technology because its design 
allows for components that are tightly coupled and interact with nonlinear patterns of causality. These 
two characteristics make it possible for small events to start chain reactions that issue into large scale 
disasters. Because these small events cannot be isolated (they are "tightly coupled") and because they 
interact unpredictably (they display nonlinear causality), they escape control and lead to unacceptable 
risks. 

• Perceived/Expected Benefits: A risk of a given magnitude is more acceptable if it comes accompa- 
nied with substantial expected benefits. One takes the risk of driving to the hearings on the proposed 
nuclear plant because the benefits of getting crucial information on this project outweigh the risks of 
having a car accident. Riding a motorcycle is a risky venture. But the benefits received from this 
activity in the form of enjoyment make the risk more acceptable than a risk of the same magnitude 
accompanied with less benefits. 

• Unknown Factors: A risk that is not understood is less acceptable than one that is well understood. 
Riding a bicycle is a risky venture but, because its risks are well known, it is more acceptable than 
other activities accompanied by risks of similar magnitudes. This factor is highly pertinent to EMFs 
(electro-magnetic fields). While EMFs are associated with certain illnesses like leukemia, their effects 
are not well known and are not understood by the public. This unknown element makes living near 
EMF producing technologies less acceptable. 

• Dread Factors: A risk may be known and its causal relation to certain illnesses well understood. 
Nevertheless it may be less acceptable because the condition it causes is one that is highly dreaded. 
EMFs, because they have been associated with leukemia in children, are much less acceptable because 
of this "dread factor." The causes of radiation sickness are well known as are the stages of the illness. 
But because this kind of illness is highly dreaded, accompanying risks are less acceptable than other 
risks of the same magnitude with less of the dread factor. Again, compare crashing on a bicycle with 
coming down with cancer to get an idea of how dread permeates the perception of risk. 

• Against Paternalism: Consider the possibility that predictability is one component of rationality. 
Then test this hypothesis in the cases presented at the beginning of this module. Can the risks posed by 
each project be examined in terms voluntariness, susceptibility to control, expected benefits, unknown 
factors, and dread factors? If so, then the public perception of this risk is rational because it can be 
predicted and understood. Thus, even though members of the public might find other risks of the 
same-or even greater-magnitude more acceptable, these perceptual factors would render the public's 
judgment intelligible and predictable. If all of this is so (and you will be testing this hypothesis in the 
exercises below) then paternalism on the part of the expert would not be justified. Furthermore, these 
insights into how risk is perceived by the public should provide you with valuable insight into how to 
communicate risk to the public. 

Responsible Risk Communication 

• Telling the Truth: Certainly, responsible risk communication should start with the commitment to 
tell the truth. But the virtue of truthfulness is more complicated than it might seem at a first glance. 
For example, were an expert to tell nonexperts the whole truth this might confuse them, especially if 
the account is loaded with complex technical explanations and jargon. Truthfulness might require some 
simplification (holding some things back or putting them in different terms), judicious comparisons, 
and the use of concrete images. Thus, the virtue of truthfulness requires (a) understanding the audience 
and (b) outlining their perceptions, concerns, feelings, and needs. With this in mind, here are some 
factors that are useful in communicating risk responsibly and truthfully. 

• Know the audience: What is their level of understanding, their needs, and their perceptions. For 
example, do they perceive the risk as voluntary, under control, accompanied with substantial benefits, 



95 

accompanied by effects that are well known, and of a low dread factor? The risk perception framework 
described above will help you to communicate risk in a helpful and responsible manner. 

• Take measures to avoid deceiving the audience: The gap between the expert (those in the know) 
and the public is sometimes quite large. This creates the temptation to fill that gap with less then 
truthful content. Avoiding deception requires more than just refraining from telling outright lies. It 
also requires taking measures to avoid subtle manipulation and unintentional deception. 

• Guard against unintentional deception: (a) Be careful when using rhetorical devises, (b) Use risk 
comparisons and analogies to provide the public with benchmarks, not to persuade them that because 
they accept risk X they should accept risk Y. (c) Be sure to point out the limits of comparisons 
and analogies. (Driving to the public hearing is a risk of a greater magnitude than living next to 
a nuclear plant but this does not include key factors such as voluntariness, control, and expected 
benefits, (d) Avoid conflicts of interest. In exercise one below, you will be looking at an example of 
risk communication taken from the movie Silkwood. Think about whether this communication is 
reponsible and honest. Do the interests of the risk communicators coincide with those of the audience? 
Do the interests of the communicators bias the content of the communication in any way? (For example, 
does the upcoming vote to keep the union play a role in this risk communication act?) 

3.5.3 What you will do ... 

In this section, you will practice managing and communicating risk information. In managing risk informa- 
tion, you will practice how to empower, inform, and involve the risk-bearing public. In communicating risk, 
you will practice different ways of helping the public to deliberate on the acceptability of certain risks. 

Exercise One 

• Listen to the doctors communicating the risks associated to exposure to plutonium while working in 
the Kerr-McGee plant in the movie, Silkwood. How effective is this communicative act? (Explain 
your assertion.) How truthful is this communicative act? (Is truth about risk value-free scientific 
information or do values play a crucial role in our deliberations on risk? What kind of values are at 
stake here?) 

• Listen to Charlie Bloom's presentation to the Milagro citizens' meeting on the economic and social risks 
associated with the Devine Recreational Center. Describe in detail the audience's reaction. Analyze 
both the content and style of Bloom's short speech. Does he facilitate or impede the process and 
substance of deliberation over risk? Rewrite Bloom's speech and deliver it before the class as if they 
were citizens of Milagro. 

• Paul Slovic pictures a part of the risk perception process in terms of unknown and dread factors. In 
general, the higher the dread and unknown factors, the less acceptable the risk. Other factors that 
enter into the public perception of risk are voluntariness, control, expected benefits, and the fairness 
of the distribution of risks and benefits. Given this depicting of the public's perception of risk, how do 
you expect the Kerr McGee employees to react to the risk information being presented by the doctors? 
How will the citizens of Milagro react to the risk information they are receiving on the ethical, social, 
and economic impacts of the Devine Recreational Project?. 

Exercise Two: Risk Perception 

• Choose one of the cases presented above in the Introduction to this module. 

• Describe those who fall into the public stakeholder group in this case. (See the above definition of 
"public") 

• Identify the key risks posed in your case.. 

• Describe how the public is likely to perceive this risk in terms of the following: voluntariness, perceived 
benefits, control, unknown factors and dread factors. 

• Given this perception of the risk, is the public likely to find it acceptable? 



96 CHAPTER 3. CSR (CORPORATE SOCIAL RESPONSIBILITY) 

Exercise Three: Risk Communication 

• You are a representative from one of the private business involved in the above case 

• Your job is to communicate to the public (whose risk perception you studied in exercise two) the risk 
assessment data you have collected on the project in question 

• Develop a strategy of communication that is based on (a) legitimate risk comparisons and analogies, (b) 
that is non-paternalistic, (c) that responds to the manner in which the public is likely to perceive the 
risk(s) in question, and (d) is open to compromise based on legitimate public interests and concerns. 

Exercise Four (optional) 

• Carry out exercises two and three using either the Milagro Beanfield War town meeting or the 
union meeting from Silkwood. 

• Pretend you are Charlie Bloom and are charged with outlining the various risks that accompany the 
Devine Recreational Facility. The rest of the class, your audience, will play the role of the differ- 
ent stakeholders. These could include the (1) townspeople (owners of local businesses such as Ruby 
Archuleta's car body shop and the general store owner, Nick Real), (2) farmers (such as Joe Mon- 
dragon), (3) local and state law enforcement officers (such as Bernabe Montoya and Kyril Montona), 
(4) Ladd Devine Recreation Center employees (such as Horsethief Shorty who leads the construction 
crew), (5) local government officials (such as mayor Sammy Cantu) and state government officials 
(including the governor), and Ladd Devine himself. 

• Give a short presentation. Then respond to questions and commentaries from your classmates who are 
working with the different roles outlined above. 

• Take a vote on whether to go ahead with the Ladd Devine project. 

3.5.4 What did you learn? 

Business and Risk 

You are a Corporate Ethics Compliance Officer developing an ethics program for your organization. How 
should your program respond to the ethics of risk issues discussed in this module? How should your corpo- 
ration go about identifying and communicating risk factors to employees? How should your corporation go 
about identifying and communicating risk factors to other stakeholders such as customers, local community, 
and government agencies? 

3.5.5 Appendix 

Bibliography 

1. Covello, V.T., Sandman, P.M. and Slovic, P. (1991) "Guidelines for Communicating Information About 
Chemical Risks Effectively and Responsibly," in Acceptable Evidence: 66-92. 

2. Cranor, C.F. (1993) Regulating Toxic Substances: A Philosophy of Science and the Law. 
Oxford University Press: London. 

3. Fingarette, H. (1971) Criminal Insanity. University of California Press, Berkeley, CA: 171. 

4. Mayo, D.G., Hollander, R.D., Editors. (1991) Acceptable Evidence: Science and Values in Risk 
Management. Oxford University Press: London. 

5. Mayo, D.G. (1991) "Sociological Versus Metascientific Views of Risk Assessment," in Acceptable 
Evidence. Oxford University Press: London: 249-280. 

6. Slovic, P. (1991) "Beyond Numbers: A Broader Perspective on Risk Perception and Risk Communica- 
tion," in Acceptable Evidence: 48-65. 

7. Perrow, C. (1984) Normal Accidents: Living with high-risk technologies. Basic Books, NY, NY. 

8. Reason, J. (1990/1999) Human Error Cambridge University Press: London. 

9. Sagoff, M. (1985) Risk-Benefit Analysis in Decisions Concerning Public Safety and Health. 
Kendall/Hunt: Dubuque, Iowa. 



97 

10. Sagoff, M. The Economy of the Earth: Philosophy, Law, and the Environment. Cambridge 
University Press: London. 

11. Sandel, M.J. (1982/1998) Liberalism and the Limits of Justice, 2nd Ed. Cambridge University 
Press, London. 

12. Shrader-Frechette. (1991) "Reductionist Approaches to Risk," in Acceptable Risk. 218-248. 

13. Thompson, P.B., (1999) "The Ethics of Truth-Telling and the Problem of Risk." Science and Engi- 
neering Ethics 5(4): 489-510. 

14. "Glossary" Online Ethics Center for Engineering 1/31/2006 6:57:46 PM National Academy of Engi- 
neering Accessed: Saturday, December 27, 2008 www.onlineethics.org/CMS/glossary.aspx 

This optional section contains additional or supplementary information related to this module. It could 
include: assessment, background such as supporting ethical theories and frameworks, technical information, 
discipline specific information, and references or links. 

3.5.6 EAC ToolKit Project 

3.5.6.1 This module is a WORK-IN-PROGRESS; the author(s) may update the content as 
needed. Others are welcome to use this module or create a new derived module. You can 
COLLABORATE to improve this module by providing suggestions and/or feedback on your 
experiences with this module. 

Please see the Creative Commons License 10 regarding permission to reuse this material. 

3.5.6.2 Funded by the National Science Foundation: "Collaborative Development of Ethics 
Across the Curriculum Resources and Sharing of Best Practices," NSF-SES-0551779 



D http://creativecommons.org/licenses/by/2.0/ 



98 CHAPTER 3. CSR (CORPORATE SOCIAL RESPONSIBILITY) 



Chapter 4 

CG (Corporate Governance) 



4.1 Different Approaches to Corporate Governance 1 

-The first link refers to a news story on Dunn's resignation from the Hewlett-Packard board. 
It is taken from PBS's Online NewsHour in a report delivered by Margaret Warner on September 11, 2006. 

-The second link provides background information on the Hughes Aircraft case profiled just below. 

NOTE: 

Arthur Andersen 

Once a highly respected company, Arthur Andersen no longer exists having gone bankrupt in the wake of the 
Enron disaster. Arthur Andersen provided Enron with consulting and accounting services. The consulting 
division was more successful but the accounting division, with its long tradition of outstanding ethical service, 
was the corporation's backbone. Arthur Andersen signed off on Enron's use of mark-to-market accounting 
which allowed Enron to project optimistic earnings from their deals and then report these as actual profits 
years before they would materialize (if at all). They also signed off on Enron's deceptive use of special 
purpose entities (SPE) to hide debt by shifting it from one fictional company to another. With Arthur 
Andersen's blessing, Enron created the illusion of a profitable company to keep stock value high. When 
investors finally saw through the illusion, stock prices plummeted. To hide their complicity, Arthur Andersen 
shredded incriminating documents. For federal prosecutors this was the last straw. The Justice Department 
indicted the once proud accounting firm convinced that this and previous ethical lapses (Sunbeam and Waste 
Management) showed a pattern of unabated wrongdoing. Arthur Andersen was conficted of obstructing 
justice on June 15, 2002 and closed its doors shortly after. 

AA Timeline (Taken from Smartest Guys in the Room) 

• 1913-Founded by Arthur Andersen: "think straight, talk straight" 

• Stood up to Railroad company in early years. When asked to change accounting standards, Andersen 
said, "There is not enough money in the city of Chicago [to make AA give into client demands]" 

• 1947-1963-Leonard Spacek became president of AA succeeding Arthur Andersen. 

• Spacek helped motivate the formation of the Financial Accounting Standards Board. AA also served 
as conscience of accounting profession criticizing the profession and the SEC (Securities and Exchange 
Commission) for "failing to square its so-called principles with its professional responsibility to the 
public." 

• 1963-1989-Slow erosion of standards and development of competition between accounting and consult- 
ing divisions. (Consulting division was developed to take advantage of a profitable direction in the 
financial induistry.) 



1 This content is available online at <http://cnx.Org/content/ml7367/l.l/>. 

99 



100 CHAPTER 4. CG (CORPORATE GOVERNANCE) 

• 1989-Consultants achieve relative autonomy as "separate business unit." (McLean: 144) 

• 1997-Consultants break from firm. 

• 1988-1991-Arthur Andersen receives 54 million in fees from Enron 

• 2000-Enron pays AA 52 million. The lion share of this was for consulting fees. 

• June 15, 2002-AA found guilty of obstruction of justice. "Today's verdict is wrong.. ..The reality here 
is that this verdict represents only a technical confiction." (McLean: 406) 

Hughes Aircraft 

Howard Hughes founded this company at the beginning of the twentieth century. Hughes became a regular 
supplier of military hardware to the U.S. military. In the 1980's this included parts for surface to air misiles 
and fighter aircraft. One division specialized in computer chips designed to convert analogue information to 
digital for use in guidance systems and decision support systems. For example, these chips interacted with 
radar to help pilots of fighter aircraft avoid enemy missiles and also served as an essential component for 
missile guidance systems, the so-called smart bombs. Hughes had won the competitive bids for these highly 
profitable military projects but they had also committed themselves to tight delivery schedules with inflexible 
deadlines. And on top of this, the U.S. Airforce demanded that these computer chips and the systems that 
integrated them be rigorously tested to show that they could withstand the severe environmental stresses 
of battle. Hughes soon fell behind on the delivery of these computer chips causing a chain reaction of other 
delays both within the company and between the company and other links in the military supply chain. 
The environmental tests carried out by quality control under the supervision of Frank Saia had worked 
hard to complete the time-consuming tests and still remain on schedule with deliveries; hot parts (parts 
in high demand) were pulled to the front of the testing line to keep things running but soon even this 
wasn't enough to prevent delays and customer complaints. Giving way to these pressures, some Hughes 
supervisors pushed employees to pass chips without testing and even to pass chips that had failed tests. 
Margaret Gooderal and Ruth Ibarra resigned from the company and blew the whistle on these and other 
ethical failings that had become rampant in Hughes. So the corporate social responsibility question becomes 
how to change this culture of dishonesty and restore corporate integrity to this once innovative and leading 
company. (Background information on Hughes can be found at computingcases.org.) 
Patricia Dunn v. Tom Perkins on Corporate Governance 

When Patricia Dunn became a "non-executive" chairman of Hewlett-Packard's board on February 7, 2005, 
she brought with her an outstanding reputation in corporate governance. Her top priorities were to oversee 
the election of a new CEO after the firing of Carly Fiorina whose management of the recent acquisition of 
Compaq had lost her the HP board's support. Dunn also was determined to stop leaks to the press from 
high-level HP officials. She viewed the latter task as a fundament component of the post-Enron corporate 
governance approach she felt was needed as Hewlett-Packard moved into the 21st century. But her formal 
take on CG was at odds with powerful board member and successful venture capitalist, Tom Perkins. In his 
opinion, too strict an approach to CG stood in the way of HP culture and took focus away from competing 
with Dell and IBM as well as staying on the cutting edge in the development of new technology. As the leaks 
continued, Dunn's investigation into their source (most likely a discontented HP board member) became 
more active and rigorous. And the disagreements between her and board member Perkins deepened; their 
incompatible views on CG (and other disagreements) led to Perkins's resignation from the HP board. Things 
became critical when Perkins received a letter from A.T. and T. informing him that an account had been 
established in his name (but without his knowledge or consent) using the last 4 digits of his social security 
number and his private phone number. During the HP-led investigation into the press leaks, a private 
investigation firm used an illegal technique known as "pretexting" to obtain confidential information about 
HP board members and news reporters including private phone and social security numbers. Perkins reported 
this to the SEC, and Patricia Dunn, as chairman and de facto head of the leak investigation, was indicted 
on four criminal charges including identity theft. 

Dunn focused on incompatible views of corporate governance as one of the causes of the rift that had 
developed between her and Perkins's: "Tom's model of governance may be appropriate in the 
world of venture capital, but it is outmoded and inappropriate in the world of public company 
governance." (Stewart, 165) She also made clear her strong views on board members leaking confidential 



101 

information shared during board meetings to the press: "The most fundamental duties of a director— 
the duties of deliberation and candor— rely entirely upon the absolute trust that each director 
must have in one another's confidentiality. This is true for trivial as well as inmportant 
matters, because even trivial information that finds its way from the boardroom to the press 
corrodes trust among directors. It is even more critical when discussions can affect stock 

prices Leaking "good" information is as unacceptable as leaking "bad" information— no one 

can foretell how such information may advantage or disadvantage one investor relative to 
another." (Stewart, 156) 
Questions 

How can successful corporate governance programs be integrated into companies with free-wheeling, inno- 
vative cultures without dampening creative and imaginative initiatives? How does one make sense of the 
fundamental irony of this case, that a conscientious pursuit of corporate governance (attacking violations of 
board confidentiality) can turn into violation of corporate governance (violation of the privacy and persons 
of innocent board members)? 



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it with your own files.) 



4.1.1 Introduction 

James B. Stewart, in a New Yorker article about Patricia Dunn and Hewlett-Packard, describes corporate 
governance as "a term that technically refers to all aspects of running a corporation but in recent years 
has come to emphasize issues of fairness, transparency, and accountability." This module looks at corporate 
governance from the macro perspective, (1) examining the management strategies adopted by a firm to 
ensure compliance and pursue excellence and (2) from the standpoint of government as it seeks to minimize 
unethical corporate behavior and to maximize the corporation's contribution to social welfare. 

4.1.2 What you need to know . . . 

4.1.2.1 Prisoner's Dilemma: Cooperation or Competition? 

Scholarly debates on corporate governance have turned on the advocacy of different approaches, many of 
which can be modeled mathematically. Two approaches are based on the concepts of agency and stewardship. 
(See Davis et. al. in Clarke 2004) To enter into this debate, you will reenact the "Prisoner's Dilemma." 
Imagine that two patriotic spies, A and B, have just been captured by the enemy. Both are placed in separate 
interrogation cells and are being pressured to confess and provide details about their spying activities. A and 
B would like to coordinate their actions but the enemy has kept them apart to prevent this. Their objective 
is to pit A against B another in order to get the desired information. To do this, they have set forth the 
following systems of motivations, i.e., punishments and rewards. 

Options for the Prisoners 



102 



CHAPTER 4. CG (CORPORATE GOVERNANCE) 



If both A and B confess. A and B are put in jail for five years each. The net loss in this scenario 
is 10. This is the least desirable alternative from the collective standpoint. 

If one confesses and the other does not. The confessor is released immediately while the non- 
confessor gets seven years in prison. This maximizes the confessor's self interest but severaly punishes 
the patriotic, non-confessor. Net loss is 7. 

If both do not confess. After six months of half-hearted interrogation (most of this time is for 
processing the prisoners' release), both are set free for lack of evidence. While not maximizing self 
interest (this lies in confessing while the other remains silent) this does maximizes overall welfare by 
producing a net loss of only 1. 

Prisoner Dillema Options Summarized 



Prisoner A / Prisoner B 


Confess 


Not Confess 


Confess 


Both go to jail for 5 years (Net 
loss is 10) 


A goes to jail for 7 years. B is 
released. (Net loss is 7) 


Not Confess 


B goes to jail for 7 years. A is 
released (Net loss is 7) 


Both held for six months, then re- 
leased. (Net los is 1.0) 



Table 4.1 



Assumptions in the Prisoner Dilemma 

• Cooperation produces the best collective option and the second best individual option. This, in turn, 
assumes that cooperation produces more social welfare than competition. 

• Free riding (competing) on the cooperation of others produces the most individual gains (for the free 
rider) but the second worst collective results. Society suffers loses from the harm done to the trusting, 
non-confessor and from the overall loss of trust caused by unpunished free-riding. 

• Unlimited, pure competition (both prisoners confess) produces the worst collective results and the 
second worst individual results. 

• Multiple iterations of the prisoner's dilemma eventually lead to cooperative behavior. But what causes 
this? (1) The trust that emerges as the prisoners, through repeated iterations, come to rely on one 
another? Or (2) the fear of "tit-for-tat" responses, i.e, that free riding on the part of one player will 
be punished by free riding on the part of the other in future iterations? 

• Does the Prisoner's Dilemma assume that each player is a rational, self-interest maximizer? Are the 
players necessarily selfish in that they will seek to maximize self interest even at the expense of the 
other players unless rewards and punishments are imposed onto the playing situation from the outside? 

The Prisoner's Dilemma is designed to model the reality of corporate governance where the directors/owners 
of a corporation delegate responsibility for the corporation's operations to managers who are charged with 
pursuing, not their own interests, but those of their directors. The problem of corporate governance is how 
this cooperative arrangement is institutionalized. Can managers be left alone and trusted to pursue the best 
interests of the corporation? This is implied in stewardship theory. Or is it necessary to design a system 
of controls to keep the managers from diverting the operations of the corporation toward their exclusive, 
self-interests? This is the approach taken in agency theory. Modeling this in terms of repeated iterations 
of the prisoner's dilemma, does cooperation emerge as the most reliable strategy in the long run? Or does 
it need to be manufactured by introducing a system of incentives such as fear of tit-for-tat strategies? The 
Prisoner's Dilemma models the central problems of corporate governance by asking whether cooperation 
naturally emerges between managers and directors or whether it needs to be manufactured through a system 
of punishments and rewards. 



103 

4.1.2.2 A Short Footnote on Human Nature 

• One important means for classifying different approaches to corporate governance is to reflect on the 
associated account of human nature. This is a very complex issue but, fortunately, political philosophy 
provides us with some useful insights. 

• Thomas Hobbes in the Leviathan presents a comprehensive psychological analysis of human nature 
based on seventeenth century physics. The focal point of this analysis is the human individual's 
unlimited pursuit of desire. Without external checks (primarily the threat of punishment imposed 
by a powerful sovereign) the State of Nature (where human individuals pursue self interest without 
external checks) is identical to a State of War. This war of all against all is "solitary, poore, nasty, 
brutish, and short." 

• Hobbes's view has been characterized by C.B. Macphearson as "possessive individualism" which por- 
trays the self as the possessor of its own attributes including the property acquired through its actions. 
This leads to a view called atomic individualism which is based on the claim that the self has its 
characteristics and determinate structure prior to and independently of any social interaction. 

• Jean- Jacques Rousseau offers a brilliantly original criticism of Hobbes' conception of human nature 
in his Second Discourse, the Discourse on the Origin of Inequality. According to him, Hobbes's 
characterization of human nature in the State of Nature is actually a description of the human corrupted 
by society and the acquisition of property. "The first person who, having enclosed a plot of 
land, took it into his head to say this is mine and found people simple enough to believe 
him, was the true founder of civil society. What crimes, wars, murders, what miseries 
and horrors would the human race have been spared, had someone pulled up the stakes 
or filled in the ditch and cried out to his fellow men: "Do not listen to this imposter."" 
Rousseau argues that before the notion of property, the human's desire to preserve self was balanced 
by the social feeling of pity brought forth by the suffering of others. Only the unchecked pursuit of 
property (seen in terms of exclusive possession) would bring the motive of self-interest into conflict 
with natural pity. 

• In opposition to Hobbes's atomic and individualistic self, a group of political philosophers, beginning 
with Aristotle, see the self as primarily social. Aristotle characterizes the human as a political animal 
(a being who naturally constructs a social organism called the "polus"). Sandel describes a "thick self" 
constructed out of familial, social and political content; this content is integrated into the core of the 
self. Werhane's description of this "social animal" is worth quoting in full: "In that socialization 
process, we develop a number of interests, roles, memberships, commitments, and values 
such that each individual is an historical, cultural, and social product, a pluralistic bundle 

of overlapping spheres of foci, a thick self or selves [T]here is no self as precritical, 

transcendental subject, totally ideal spectator or dispossessed subject. 

• Thus a series of views of human nature emerge that are instrumental in forming different approaches to 
corporate governance. Hobbes's atomistic individualism will favor the compliance approach mandated 
by agency theory as directors set up external checks to self-serving managers. Rousseau's more nuanced 
view would require structures to hold the pursuit of self-interest in check while strengthening the equally 
natural impulses toward socializability and cooperation. The social conception of the self would treat 
the corporation as an environment where managers, as stewards, recruit employees who will quickly 
commit to the central corporate values and then develop supporting structures and procedures to help 
their colleagues find meaningful work while fulfilling social, corporate objectives. 



4.1.2.3 Approaches to Corporate Governance 

Summary Table 



104 



CHAPTER 4. CG (CORPORATE GOVERNANCE) 



(1,1) 


Description(l,! 


!)Theory of 
Human Na- 
ture(l,3) 


Owner 

Role (1,4) 


Manager 

Role(l,5) 


Corporate 
Ethics Fo- 

cus(l,6) 


Agency The- 

ory(2,l) 


Managers act 
as agents of 
the corpora- 
tion fulfilling 
the goals es- 
tablished by 
the owners / 
directors(2,2) 


Managers are 
rational, but 
self-interested 
beings who 
must be 
controlled 
from the 
outside(2,3) 


Owners are 
principals, 
that is, they 
originate the 
action and 
bear primary 
moral respon- 
sibility. (2,4) 


Managers are 
agents, that 
is, responsible 
for acting in 
the interest 
of the princi- 
pals who hire 
them. Faith- 
ful agency 
implies avoid- 
ing conflicts 
of interests 
and main- 
taining confi- 
dences. (2, 5) 


Compliance 
focus uses 
(1) rule-based 
codes, (2) 
systems of 
monitoring, 
and (3) pun- 
ishments and 
rewards to 
motivate com- 
pliance from 
outside. (2,6) 


Stockholder 

A P - 

proach(3,l) 


Corporation 
is property of 
stockholders 
who dispose of 
it as they see 
fit. (3,2) 


Stockholders 
pursue self 
interest. They 
are rational 
(instrumen- 
tal), economic 
self-interest 
maximiz- 
ers.(3,3) 


Owners invest 
in corporation 
and seek a 
return (profit) 
on their invest- 
ment. (3,4) 


Managers are 
responsible 
for ensuring 
that owners 
get maximum 
return on in- 
vestment. (3, 5) 


Stockholders 
direct compli- 
ance toward 
manager 
control and 
external con- 
formity to 
laws. (3,6) 


Stakeholder 

Ap- 

proach(4,l) 


Owners drop 
out of center 
focus. Corpo- 
ration is run 
for the sake of 
its stakehold- 
ers. (4,2) 


Groups have 
special in- 
terests but 
recognize the 
need to inte- 
grate these. 
Humans pos- 
sess capacity 
for procedural 
reasoning. (4,3) 


Owners drop 
to one of a 
group of equal 
stakeholders. 
Still advocate 
their finan- 
cial interests 
but not to 
exclusion of 
other stake- 
holders. (4,4) 


Managers 
are meta- 
stakeholders. 
They treat 
stakeholders 
and stakes 
equally and 
integrate 
these to the 
fullest extent 
possible. (4,5) 


(4,6) 


continued on next page 



Stewardship 
Model(5,l) 



Managers act 
as stewards for 
absentee own- 
ers; oversee 
the operations 
of corporation 
and exercise 
care over them. 
Emotion (care) 
plays an equal 
role with in- 
strumental ra- 
tionality.^^) 



Desire and 

self interest 
are balanced 
out by social 
motives such 
as Rousseau's 
pity and 

Aristotle's 
virtues. (5,3) 



Owners still 
set cardinal 
objectives but 
they also are 
responsible 
for providing 
managers with 
a meaningful 
work environ- 
ment.^^) 



Managers are 
stewards exer- 
cising care over 
the property of 
the owners in 
their absence. 
Stewardship 
is based on 
internally gen- 
erated and 
self-imposed 
motives toward 
care. (5, 5) 



105 

Value-based: 

(1) identify 
and formu- 
late common 
standards of 
excellence, 

(2) develop 
training pro- 
grams to foster 
pursuit of 
these excel- 
lences, and 

(3) develop 
support struc- 
tures to help 
reduce value 
"gaps." (5,6) 



Table 4.2 



Agency Theory 

1. In agency theory, the owners/directors set the central objectives of the corporation. Managers, in turn, 
are responsible for executing these objectives in the corporation's day-to-day operations. Corporate 
governance consists of designing structures and procedures to control management, i.e., to keep their 
actions in line with director-established objectives. 

2. Managers cannot be trusted to remain faithful agents, i.e., to stay faithful to the interests and goals 
of the owners/directors. This presupposes a particular view of human nature. Humans are rational, 
egoists. They have desires and use reason to devise means to realize them. Since one desire can be 
checked only by another desire, this egoism is potentially without limit. Agency theory assumes that 
managers will divert corporate resources to pursue their own selfish ends unless checked by some system 
of external controls. Thus, another key element of corporate governance under agency theory is to find 
the most efficient systems of controls to keep manager egoism in check. 

3. The owners/directors play the role of principal in agency theory. The principal originates the action 
and bears primary moral and legal responsibility for it. Most of the time the principal of an action is 
also its executor. But there are times when the principal lacks the knowledge and skill necessary for 
executing the objectives he or she originates. In this case, the principal contracts with an agent. The 
principal authorizes the agent to act on his or her behalf. This requires that the agent remain faithful 
to the goals and interests of the principal. See Hobbes's Leviathan, Chapter 16 for an important 
historical account of the agent-principal relation. 

4. Managers are agents. Their primary responsibility is to serve as faithful executors of the goals and 
interests of the principals. This requires, first, that, managers are responsible for exercising their pro- 
fessional judgment in a competent way. Managers are also responsible for remaining faithful to the 
interests of their principals. To do this they must avoid conflicts of interests and maintain confiden- 
tialities (i.e., keep secrets). Agent can also range from being free (unguided by principals) to bound 
(tightly monitored and controlled by principals). 

5. How does ethics enter into corporate governance under agency theory? Primary emphasis is placed 
on compliance, i.e., enforced conformity to rules that constitute minimum thresholds of acceptable 
behavior. Compliance approaches develop (1) rule based codes, (2) systems of monitoring to detect 
violations, and (3) punishments and rewards to deter non-compliance and reward compliance. Trevino 
and Weaver provide an empirical analysis to the goals achieved through compliance ethics: "[4] the 
perception that better decisions are made because of the ethics program [5] ethical advice seeking, [6] 



106 CHAPTER 4. CG (CORPORATE GOVERNANCE) 

decreased unethical behavior in the organization. ..[7] ethical awareness." (Weaver and Trevino, 1999: 
333.) 

Stockholder Theory 

1. The stockholder approach is quite similar to that set forth in agency theory. The difference is that it 
views the corporation as the property of its owners (stockholders) who may dispose of it as they see 
fit. Most of the time this involves using it to receive maximum return on investment. 

2. Stockholders are oriented toward self-interest, so stockholder theory, along with agency theory, takes 
an egoistic/Hobbesian view of human nature. Humans are rational, self-interest maximizers. Owners 
should expect this from the corporation's managers and employees. They should integrate procedures 
and controls that channel the corporation and its members in the direction of their (owners) self- 
interest. 

3. The owners invest in the corporation and seek a return (profit) on this investment. But this narrow 
role has been expanded into overseeing the operations of the corporations and its managers to ensure 
that the corporation is in compliance with ethical and legal standards set by the government. Just as 
the master, under tort law, was responsible for injury brought about by the negligence of a servant, so 
also are directors responsible for harm brought about by their property, the corporation. 

4. Managers are role-responsible for ensuring that investors get maximum return on their investment. 
This includes exercising good business judgment and avoiding conflicts of interests and violations of 
confidences. 

5. Like corporations operating within agency theory, stockholder corporations focus on compliance strate- 
gies to monitor managers and make sure they remain faithful agents. However, directors under the 
stockholder approach also take seriously oversight responsibility which include ensuring corporate com- 
pliance with laws such as Sarbanes-Oxley and the Federal Sentencing Guidelines. 

Stakeholder Theory 

1. Owners drop out of the center of attention in this approach to become one of several, equal stakeholders. 
A stakeholder is any group or individual that has a vital interest, right, good, or value in play or at 
risk. (A gambler's stake is the money on the table in play as the roulette wheel turns. Depending 
on the outcome of the situation, the gambler either keeps or loses the stake.) Examples of corporate 
stakeholders include stockholders, employees, customers, suppliers, local community, and government. 
The corporation on this view exists for the sake of its stakeholders, not stockholders. 

2. The stakeholder view can be closely tied to egoism if it is assumed that the different stakeholder groups 
exist to maximize their selfish interests. But the stakeholder approach to corporate governance goes 
beyond the egoistic account of human nature. The corporation (and its managers) become responsible 
for mediating between these different, often conflicting, stakeholder interests, always keeping in mind 
that all stakeholders deserve equal respect. If stakeholders have any solidarity with one another, it 
is because the interest set of each includes the interests of the others. (This is how Feinberg defines 
solidarity.) The ability to envision the interests of each stakeholder and to work toward integrating 
these must be built on a view of human nature that is as altruistic as egoistic. While not embracing the 
social view of human nature outlined above, the stakeholder view assumes that stakeholders are capable 
and willing to negotiate and bargain with one another. It begins, in other words, with enlightened and 
long term self interest. 

3. The first feature of the owner role is the reduction in centrality mentioned just above. They advocate 
their interests in the same arena as the other stakeholders, but they also must work to make their 
interests compatible with the other stakeholders. This requires integrating interests when possible and 
drawing integrity-preserving compromises when necessary. (See Benjamin 1990). 

4. Managers play an important meta-role here. They are faithful agents but of all stakeholders, not just 
stockholders. Thus, they becomes referees or (to switch metaphors) brokers between stakeholders. They 
oversee the generation of expansive corporate values capable of absorbing and integrating narrower 
stakeholder interests. 



107 

5. Stakeholder approaches combine compliance and value-based approaches. In compliance, corporate 
officers define a moral and legal minimum; this consists of the minimum set of rules necessary for 
stakeholder coexistence. Beyond this, value-based approaches seek to create common, broader objec- 
tives, aspirations that can unite the different stakeholders in the pursuit of excellence. Stakeholder 
approaches need both; the compliance approach gets things started and the values-based approach sets 
them on the path to excellence. 

Stewardship Theory 

• Managers and employees can be trusted to act as stewards or guardians of the corporation. This means 
that while they do not own the corporation's resources, they will safeguard these for the owners. A 
steward is a caretaker who looks after the owner's property and interests when the owner is absent 

• This approach definitely makes use of the social approach to human nature. Humans, naturally and 
spontaneously, realize their innermost natures by forming social unions. The corporation, under this 
view, is such an organization. While taking on the characteristics of a social contract with the other 
approaches, especially agency theory, the corporation under the stewardship view is more of a coopera- 
tive, collaborative enterprise. Humans can act and find meaning in interests and concerns well beyond 
the confines of the ego. In fact, to organize the corporation around egoistic assumptions does harm to 
those capable of action on altruistic motives. The emphasis here is on building trust and social capital 
to strengthen the social potentialities of human nature. 

• Owners still establish the cardinal objectives for the sake of which the corporation exists. But they are 
also responsible for providing managers with an environment suitable developing human potentialities 
of forming societies to collaborate in meaningful work. 

• Managers act as stewards or caretakers; they act as if they were owners in terms of the care and 
concern expressed for work rather than merely executors of the interests of others. In other words, the 
alienation implied in agency theory (acting not out of self but for another), disappears as the managers 
and employees of the corporation reabsorb the agent function. 

• Stewardship approaches are primarily value-based. They (1) identify and formulate common aspira- 
tions or values as standards of excellence, (2) develop training programs conducive to the pursuit of 
excellence, and (3) respond to values "gaps" by providing moral support. 



4.1.2.4 External Controls: Fining, Stock Dilution, Changing Internal Governance, Court Or- 
dered Adverse Publicity, and Community Service 

Classifications of Corporate Punishments 



Descriptio i Example 



Target of 
Punish- 
ment 



Deterrence Non- 



Trap 
Avoided? 



financial 
Values 
Ad- 
dressed? 



Responsive Interference 



Adjust- 
ment 



with 
Cor- 
porate 
Black 
Box 



continued on next page 



108 



CHAPTER 4. CG (CORPORATE GOVERNANCE) 



Monetary 


Fines 


Pentagon 


Harms in- 


Fails to 


Few or 


None 


No inter- 


Exaction 




Procure- 
ment 
Scandals 


nocent 


Escape 


None 
Targeted 




ference 


Stock Di- 


Dilute 




Stockholder 


i Escapes 


Few or 


Limited 


No inter- 


lution 


Stock and 
award to 
victim 




(Not nec- 
essarily 
guilty) 


by attack- 
ing future 
earnings 


None 




ference 


Probation 


Court 


SEC Vol- 


Corporation 


Escapes 


Focuses on 


Passive 


Substantial 




orders 


untary 


and its 


since it 


manage- 


adjust- 


entry into 




internal 


Disclosure 


Members 


mandates 


ment and 


ment since 


and in- 




changes 


Program 




organi- 


subgroup 


imposed 


terference 




(special 






zational 


values 


from 


with cor- 




board 






changes 




outside 


porate 




appoint- 












black box 




ments) 














Court 


Court 


English 


Targets 


Escapes 


Loss of 


Active ad- 


No direct 


Ordered 


orders 


Bread 


corporate 


(although 


prestige / 


justment 


inter- 


Adverse 


corpora- 


Acts (Hes- 


image 


adverse 


Corporate 


triggered 


ference 


Publicity 


tion to 


ter Prynne 




publicity 


shame / 


by shame 


(corpo- 




publicize 


shame in 




indirectly 


Loss of 




ration 




crime 


Scarlet 
Letter) 




attacks 

financial 

values) 


Face/Honor 




motived 
to restore 
itself) 


Communit 


yCorporation 


Allied 


Representat 


.vEscapes 


Adds 


Passive 


None 


Service 


performs 


chemical 


groups/indi 


ddniffife 


value to 


or no ad- 




Orders 


services 


(James 


from cor- 


targets 


commu- 


justment: 






mandated 


River 


poration 


non- 


nity 


sometimes 






by court 


Pollution) 




financial 
values 




public 
does rec- 
ognize 
that cs is 
punish- 
ment 





Table 4.3 



Requirements of Sarbanes-Oxley (From Dyrud: 37) 

• Provide increased protection for whistle-blowers 

• Adhere to an established code of ethics or explain reasons for non-compliance 

• Engage in "full, fair, timely and understandable disclosure" 

• Maintain "honest and ethical" behavior. 

• Report ethics violations promptly 

• Comply with "applicable governmental laws, rules, and regulations" 

• Dyurd cites: ELT, Ethics and Code of Conduct, n.d.; http://www.elt-inc.com/solution/ethics 
_and_code_of_conduct_training_obligations.html 

Ammended Federal Sentencing Guidelines (Dyrud 37) 

• Establishing standards and procedures to prevent and detect criminal conduct 



109 

Promoting responsibility at all levels of the program, together with adequate program resources and 
authority for its managers 

Exercising due diligence in hiring and assigning personnel to positions with substantial authority 
Communicating standards and procedures, including a specific requirement for training at all levels 
Monitoring, auditing, and non-internal guidance/reporting systems 
Promiting and enforcing of compliance and ethical conduct 

Taking reasonable steps to respond appropriately and prevent further misconduct in detecting a vio- 
lation 



4.1.3 What you will do ... 

Module Activities 

• Study the Prisoner's Dilemma to help you formulate the central challenges of corporate governance. 

• Study four different approaches to corporate governance, (1) agency theory, (2) the stockholder ap- 
proach, (3) the stakeholder approach, and (4) stewardship theory. 

• Examine corporate governance from the macro level by (1) looking at the structural changes a company 
can make to comply with legal and ethical standards and (2) examining the balances that government 
must make to control corporate behavior and yet preserve economic freedom. 

• Design a corporate governance program for an actual company that you and your group choose. It 
should be a company to which you have open access. You will also be required to take steps to gain 
the consent of this company for your study. 

• Reflect on how to integrate this module's macro description of corporate governance with the micro 
perspective presented in the module on moral ecologies and corporate governance. 

Corporate Governance Plans 

• A corporate code of ethics that responds to the specific ethical problems uncovered by your profile of 
the corporation you are studying. 

• A corporate ethics training program designed to acquaint employees, owners, and managers with the 
company's value aspirations and compliance objectives. 

• A Corporate Ethics Audit designed to identify and minimize ethical risks. 

• A comprehensive ethics compliance program that responds to the requirements set forth in Sarbanes 
and Oxley as well as the Federal Sentencing Guidelines. 

• A program in corporate excellence designed to articulate and realize the core values that define your 
company's identity and integrity. 

4.1.4 What did you learn? 

This material will be added later. Students will be given an opportunity to assess different stages of this 
module as well as the module as a whole. 

4.1.5 Appendix 

Bibliography 

1. Benjamin, M. (1990) Splitting the difference: Compromise and Integrity in Ethics and Pol- 
itics. Lawrence, KS: University of Kansas Press. 

2. Carol, A. B., "Social Responsibility," in Werhane, P., and Freeman, R. E., eds. (1997, 1998) Blackwell 
Encyclopedic Dictionary of Business Ethics. Oxford, UK: Blackwell Publishers, INC: 593-595. 



110 CHAPTER 4. CG (CORPORATE GOVERNANCE) 

3. Clarke, T. (2004) "Introduction: Theories of Governance-Reconceptualizing Corporate Governance 
Theory After the Enron Experience," in Theories of Corporate Governance: The Philosophical 
Foundations of Corporate Governance, ed. Thomas Clarke. New York: Routledge: 1-30. 

4. Davis, J.H., Schoorman, D., and Donaldson, L. "Toward a Stewardship Theory of Management, "in 
Theories of Corporate Governance: The Philosophical Foundations of Corporate Gover- 
nance, ed. Thomas Clarke. (2004) New York: Routledge: 1-30. 

5. Dyrud, M.A. (2007) "Ethics, Gaming, and Industrial Training," in IEEE Technology and Society 
Magazine. Winter 2007: 36-44. 

6. Feinberg, J. (1970) "Collective Responsibility" in Doing and Deserving: Essays in the Theory 
of Responsibility. Princeton, NJ: Princeton University Press: 234. 

7. Fisse, B. and French, P.A., eds. (1985) Corrigible Corporations and Unruly Law. San Antonio, 
TX: Trinity University Press. 

8. French, P. A. (1984) Collective and Corporate Responsibility. New York: Columbia University 
Press.. 

9. Hobbes, T. (1651, 1968) Leviathan. Middlesex, England: Penguin Books: 186. 

10. Macpherson, C.B. (1962) The Political Theory of Possessive Individualism: Hobbes to Locke. 
London, UK: Oxford University Press: 3. 

11. May, L. (1987) The Morality of Groups: Collective Responsibility, Group-Based Harm, and 
Corporate Rights. Notre Dame, IN: University of Notre Dame Press. 

12. McLean, B., and Elkind, P. (2003) The Smartest Guys in the Room: The Amazing Rise and 
Scandalous Fall of Enron. New York: Portfolio: 141-149. 

13. Paine, L.S. (1994) "Managing for Organizational Integrity," in Harvard Business Review, 
March/April 1994. 

14. Rousseau, J.J. (1987) Jean-Jacques Rousseau: The Basic Political Writings Translated by 
Donald A. Cress. Indianapolis, IN: Hackett Publishing Company: 60. 

15. Stewart, J.B. (2007) "The Kona Files: How an obsession with leaks brought scandal to Hewlett- 
Packard," in The New Yorker, February 19 and 26, 2007: 152-167. 

16. Stone, C. D. (1975) Where the Law Ends: The Social Control of Corporate Behavior. 
Prospectr Heights, IL: Waveland Press, INC: 1-30. 

17. Swartz, M., Watkins, S. (2003) Power Failure: The Inside Story of the collapse of Enron. New 
York: Doubleday: 356. 

18. Weaver, G.R. and Trevino, L.K. (1999) "Integrated and decoupled social performance: Management 
commitments, external pressures, and corporate ethics practices." The academy of Management 
Journal, 42: 539-552. 

19. Werhane, P.H. (1999) Moral Imagination and Management Decision Making. Oxford, UK: 
Oxford University Press: 39. 

20. Werhane, P. H. (2008) "Mental Models: Moral Imagination and System Thinking in the Age of Glob- 
alization," in Journal of Business Ethics, 78: 463-474. 

21. Werhane, P. (2007) "Corporate Social Responsibility/Corporate Moral Responsibility: Is There a 
Difference and the Difference It Makes," in eds., May, S., Cheney, G., and Roper, J., The Debate 
over Corporate Social Responsibility. Oxford, UK: Oxford University Press: 459-474. 

4.1.6 EAC ToolKit Project 

4.1.6.1 This module is a WORK-IN-PROGRESS; the author(s) may update the content as 
needed. Others are welcome to use this module or create a new derived module. You can 
COLLABORATE to improve this module by providing suggestions and/or feedback on your 
experiences with this module. 

Please see the Creative Commons License 2 regarding permission to reuse this material. 



2 http://creativecommons.org/licenses/by/2.0/ 



Ill 

4.1.6.2 Funded by the National Science Foundation: "Collaborative Development of Ethics 
Across the Curriculum Resources and Sharing of Best Practices," NSF-SES-0551779 

4.2 Developing Ethics Codes and Statements of Values 3 
4,2,1 Module Introduction 

Codes of ethics evoke opposite reactions from people who teach, do research in, or are practitioners of 
occupational and professional ethics. Some hold that teaching codes of ethics is essential to preparing students 
for their future careers. Corporations, for example, have come to view codes as the cornerstone of a successful 
compliance program. Professional societies, such as the Puerto Rico State Society of Professional 
Engineers and Land Surveyors, also make the drafting, revising, and disseminating professional codes 
of ethics a central part of practicing professional engineering ethics. But many strongly opppose codes 
because they promote the wrong sorts of attitudes in those who would be influenced by them. As you will 
see below, philosophical ethicists raise objections to codes because they undermine moral autonomy, lead to 
uncritical acceptance of authority, and replace moral motives with fear of punishment. These polar stances 
are grounded in the very different perspectives from which different groups approach codes. But they are 
also grounded in the fact that codes take many different forms and serve distinct functions. For example, 
consider the introductory considerations presented in the following: 

4.2.1.1 Different Uses for Codes 

Kinds of Codes 

• Professional Codes of Ethics. Professions such as engineering and accounting have developed codes 
of ethics. These set forth the ideals of the profession as well as more mundane challenges faced by 
members. Engineering codes, for example, set forth service to humanity as an ideal of the profession. 
But they also provide detailed provisions to help members recognize conflicts of interest, issues of 
collegiality, and confidentiality responsibilities. 

• Corporate Codes of Ethics. Corporate codes are adopted by many companies to respond better 
to the Federal Sentencing Guidelines. These codes provide guidelines on particularly sticky issues 
(When does a gift become a bribe?) They also set forth provisions that express the core values 
of the corporation. These lengthy codes with detailed provisions support a compliance approach to 
organizational discipline. 

• Corporate Credos. Some companies have shortened their lengthy codes into a few general provisions 
that form a creed. Johnson and Johnson's Credo is famous in this respect and can be found by clicking 
on the Business Ethics Library link provided above. 

• Statements of Values. Finally, more mature companies find it useful to express and disseminate 
their core value commitments in Statements of Values. These form the basis of values-based decision- 
making. While codes of ethics clearly establish minimum standards of acceptable conduct, Statements 
of Values outline the aspirations that can drive companies toward continuous improvement. 

Functions or Purposes Served by Codes 

• Discipline. This function gets all the attention. Most codes are set forth to establish clearly and 
forcefully an organization's standards, especially its minimum standards of acceptable conduct. Having 
established the limits, organizations can then punish those who exceed them. 

• Educate. This can range from disseminating standards to enlightening members. Company A's 
employees learned that anything over $100 was a bribe and should not be accepted. But engineers 
learn that their fundamental responsibility is to hold paramount public safety, health, and welfare. 
Codes certainly teach minimum standards of conduct, but they can help a community to articulate 
and understand their highest shared values and aspirations. 



3 This content is available online at <http://cnx.Org/content/ml4319/l.9/>. 



112 CHAPTER 4. CG (CORPORATE GOVERNANCE) 

• Inspire. Codes can set forth ideals in a way that inspires a community's members to strive for 
excellence. They can be written to set forth the aspirations and value commitments that express a 
community's ideals. They can point a community toward moral excellence. 

• Stimulate Dialogue. Engineering professional codes of ethics have changed greatly over the last 
150 years. This has been brought about by a vigorous internal debate stimulated by these very 
codes. Members debate controversial claims and work to refine more basic statements. Johnson and 
Johnson credits their credo for their proactive and successful response to the Tylenol crisis. Regularly, 
employees "challenge the credo" by bringing up difficult cases and testing how effectively the credo 
guides decision-making and problem-solving. The CIAPR's Disciplinary Tribunal cases have served as 
a focus for discussions on how to interpret key provisions of the organization's code of ethics. The NSPE 
Board of Ethical Review decisions have also provided an excellent forum for clarifying ethical concepts 
(public safety, conflict of interest) in the context of cases brought to the board by NSPE members. The 
BER discusses cases in terms of relevant provisions of the NSPE code. Over the years, the NSPE BER 
has established a firm foundation for the resolution of difficult ethical cases by developing analogies 
with cases it has already discussed and clarified. 

• Empower and Protect. Codes empower and protect those who are committed to doing the right 
thing. If an employer orders an employee to do something that violates that employee's ethical or 
professional standards, the code provides a basis for saying, "No!". Engineers have refused to carry 
out directives that place in jeopardy the health and safety of the public based on statements like 
canon 1 of the CIAPR code. (The NSPE code has similar provisions.) Because codes establish and 
disseminate moral standards, they can provide the structure to convert personal opinion into reasoned 
professional judgment. To reiterate, they provide support to those who would do the right thing, even 
under when there is considerable pressure to do the opposite. 

• Codes capture or express a community's identity. They provide the occasion to identify, foster 
commitment, and disseminate the values with which an organization wants to be identified publicly. 
These values enter into an organization's core beliefs and commitments forming an identify-conferring 
system. By studying the values embedded in a company's code of ethics, observing the values actually 
displayed in the company's conduct, and looking for inconsistencies, the observer can gain insight into 
the core commitments of that company. Codes express values that, in turn, reveal a company's core 
commitments, or (in the case of a hypocritical organization) those values that have fallen to the wayside 
as the company has turned to other value pursuits. 

Difficulties with Codes 

• The following objections lead philosophers to argue that presenting codes of ethics in ethics classes 
undermines several key moral attitudes and practices. 

• Codes can undermine moral autonomy by habituating us to act from motives like deference to external 
authority and fear of punishment. We get out of the habit of making decisions for ourselves and fall 
into the habit of deferring to outside authority. 

• Codes often fail to guide us through complex situations. Inevitably, gaps arise between general rules and 
the specific situations to which they are applied; concrete situations often present new and unexpected 
challenges that rules, because of their generality, cannot anticipate. Arguing that codes should provide 
action recipes for all situations neglects the fact that effective moral action requires more than just 
blind obedience to rules. 

• Codes of ethics can encourage a legalistic attitude that turns us away from the pursuit of moral excel- 
lence and toward just getting by or staying out of trouble. For example, compliance codes habituate 
us to striving only to maintain minimum standards of conduct. They fail to motivate and direct action 
toward aspirations. Relying exclusively on compliance codes conveys the idea that morality is nothing 
but staying above the moral minimum. 

This module is designed to steer you through these complex issues by having you draft a Statement of 
Values for students at your university. As you work through your Statement of Values, you will learn that 
codes have strengths and weaknesses, serve different functions, and embody values. To get you started in 



113 

this process, you will study a defective code, the Pirate Credo. A quick glance is all that is needed to see 
that codes are "all too human" and need to be approached critically. In a second activity you will identify 
the values embedded in professional, corporate, and academic codes. Working with these values, you will 
develop a list upon which your group will build its own Statement of Values in a third activity. Finally, you 
will construct value profiles that include a general description, sample provisions, value-based challenges, 
and value principles. These will all contribute to motivating those in your community to commit to and 
work in concert to realize these values. 

4,2,2 How an academic community developed a Statement of Values 

A False Start 

The faculty of the Arts and Sciences College of University X decided to form a committee to write a code 
of ethics. This committee met several times during the course of an academic semester to prepare the first 
draft. When they finished, they circulated copies throughout the college. Then they held a series of pubic 
hearings where interested members of the College could criticize the code draft. These were lightly attended 
and those attending had only a few suggestions for minor changes. However, when the code was placed 
before the faculty for approval, considerable opposition emerged. For example, a provision discouraging 
faculty from gossiping was characteized by opponents as an attempt by a hostile College administration, 
working through the committee, to eliminate faculty free speech. Several opponents expressed opposition to 
the very idea of a code of ethics. "Does the administration think that our faculty is so corrupt," they aked, 
"that the only hope for improvement is to impose upon them a set of rules to be mindlessly followed and 
ruthlessly enforced?" At the end of this debate, the faculty overwhelmingly rejected the code. 

Reflections on "A False Start" 

• Should codes of ethics be democratically developed from the "bottom up" or should they be authorita- 
tively imposed from the "top down?" Or does this depend on certain characteristics of the community? 
Maybe corporate managers should have lawyers draft their codes to meet the Federal Sentencing Guide- 
lines; these completed codes should then be implemented throughout the company at all levels. Maybe 
academic communities should democratically determine their own codes, and if they are unable to do 
so, then so much the worse for the "very idea" of a code of ethics. 

• The Ethics of Team Work module presents three ways that lead groups to go off the tracks: Group 
Polarization, Groupthink, and "Going to Abilene." Do you think that any of these would explain false 
starts in developing a code of ethics? How can these group pitfalls be overcome? 

• Groups are often polarized around different and conflicting ideologies or paradigms. Thomas Kuhn 
discusses paradigms in the context of scientific debates. When these debates are fueled by conflicting 
and incompatible paradigms, they can turn acrimonious and prove extraordinarily difficult to resolve. 
For Kuhn, paradigms articulate and encapsulate different world views; the meanings and experiences 
shared by one group operating under one paradigm are often not shared by those operating under 
different paradigms. Members of the Arts and Sciences faculty of University X may have disagreed 
about the provisions proscribing gossiping because they were operating under different conceptual 
systems brought about by incommensurable paradigms. If faculty members assumed different meanings 
for 'gossiping', 'code', and 'discipline', then this would fuel the polarization of non-agreement like that 
which occurred at University X. 

• Cass Sunstein proposes that communities work around ideological or paradigm-driven disputes by de- 
veloping, in special circumstances, "incompletely theorized agreements." These agreements are brought 
about by bracketing commitments to a given ideology or paradigm. This allows one side to work on 
understanding the other instead of marshaling arguments to defend the set of views entailed by its 
paradigm. So Sunstein's recommendation to the College of Arts and Sciences of University X would 
be to suspend commitment to defending the core beliefs of the conflicting ideologies and try to hold 
discussions at a more concrete, incompletely theorized level. This makes finding common ground eas- 
ier. When shared understandings are forged, then they can serve as bridges to more complex, more 
completely theorized positions. 



114 CHAPTER 4. CG (CORPORATE GOVERNANCE) 

• Looking at this problem from a completely different angle, do codes of ethics require a background of 
trust? If so, how can trust be built up from within highly diverse and highly polarized communities or 
groups? 

• Finally, can codes of ethics be abused by more ruthless groups and individuals? For example, as those 
in the College of Arts and Sciences claimed, can codes of ethics be used by those in positions of power 
to strengthen that power and extend control over others? 

A Success Story 

• Three years later at the same university, another faculty group set out to construct a code of ethics in 
order to respond to accreditation requirements. They began with the idea of constructing a stakeholder 
code. 

• First, they identified the stakeholders of the college's activities, that is, groups or individuals who had 
a vital interest in that community's actions, decisions and policies. 

• Second, they identified the goods held by each of these stakeholders which could be vitally impacted 
by the actions of the college. For example, education represented the key good held by students that 
could be vitally impacted by the activities and decisions of the College. 

• Working from each stakeholder relation and the good that characterized that relation, members of the 
college began crafting code provisions. Some set forth faculty duties such as keeping regular office 
hours, grading fairly, and keeping up to date in teaching and research. Others emphasized student 
duties such as working responsibly and effectively in work teams, adhering to standards of academic 
honesty, and attending classes regularly. 

Because stakeholder codes embody a community's values, the individuals in charge of drafting the code 
decided that a more direct approach would be to identify the embodied values and refine them into a 
Statement of Values. This formal statement could later be developed in different directions including a more 
detailed compliance code. 

Turning their efforts toward preparing a Statement of Value Process, the Business Administration com- 
munity went through the following steps: 

1. They discussed a flawed document, the Pirate Credo. This brought about three positive results: 
participants came to see how codes embody values, that codes serve different functions, and that codes 
clarify relations between the insiders and outsiders of a community. 

2. Participants examined "bona fide" codes of ethics such as academic codes, codes of honor, corporate 
codes, and professional codes. Since codes embody values, they developed lists of the values these 
codes embodied. 

3. The sample provisions crafted in the earlier stakeholder code effort were presented so that participants 
could identify the values these embodied. Previous efforts in developing a stakeholder code could be 
benchmarked against the codes studied in the previous step. Convergences and divergences were noted 
and used to further characterize the college's community in terms of its similarities and differences 
with other communities. 

4. In this step, faculty members were asked to reduce the values list to a manageable number of five to 
seven. This led to the most contentious part of the process. Participants disagreed on the conception 
of value, the meaning of particular values like justice, and on whether rights could be treated as values. 

5. To resolve this disagreement, discussion leaders proposed using ballots to allow participants to vote 
on values. This process was more than a simple up or down vote. Participants also ranked the values 
under consideration. 

6. After the top five values were identified, efforts were made, in describing each of the remaining values, 
to find places to include at least components of the values left out. For example, while confidentiality 
was not included in the final value list, it was reintegrated as a component of the more general value 
of respect. Thus, the final values list could be made more comprehensive and more acceptable to the 
faculty community by reintegrating some values as parts of other, more general values. Another way 
of picking up values left behind in the voting process was to combine values that shared significant 



115 

content. Values that did not make it into the final list were still noted with the provision that they 
could be integrated into subsequent drafts of the Statement of Values. 

7. A committee was formed to take each value through a value template. After describing the value, 
they formulated a principle summarizing the ethical obligations it entailed, crafted sample provisions 
applying the value, and posed different challenges the value presented to help guide a process of 
continuous improvement. 

8. The committee presented its results to the faculty who approved this first draft Statement of Values 

9. The faculty then developed a schedule whereby the Statement of Values would be revisited, expanded, 
revised, and improved. 



4,2,3 Textbox 1: Responding to the Federal Sentencing Guidelines 

Recent efforts to develop ethics codes in the academic context for both students and faculty may, in part, 
stem from the success of ethics compliance programs developed in business and industry in response to 
the Federal Sentencing Guidelines. Organizational codes of ethics have been integrated alongside other 
compliance structure and activities to prevent criminal behavior, to detect criminal behavior, and to ensure 
prompt and effective organizational response once such behavior has been detected. 

The following section contains short exerpts from the Federal Sentencing Guidelines. For more 
details consult the materials referenced in note 5 below. 

• "The hallmark of an effective program to prevent and detect violations of law is that the organization 
exercised due diligence in seeking to prevent and detect criminal conduct by its employees and other 
agents. Due giligence requires at a minimum that the organization must have taken the following types 
of steps: 

• The organization must have established compliance standards and procedures to be followed by ite 
employees and other agents that are reasonably capable of reducing the prospect of criminal conduct. 

• Specific individual(s) within high levelpersonnel of the organization must have been assigned overall 
responsibility to oversee compliance with such standards and procedures. 

• The organization must have used due care not to delegate substantial discretionary authority to indi- 
viduals whom the organization knew, or should have known through the exercise of due diligence, had 
a propensity to engage in illegal activities. 

• The organization must have taken steps to communicate effectively its standards and procedures to all 
employees and other agents, e.g., by requiring participation in training programs or by disseminating 
publications that explain in a practical manner what is required. 

• The organization must have taken reasonable steps to achieve compliance with its standards, e.g., 
by utilizing monitoring and auditing systems reasonably designed to detect criminal conduct by its 
empoyees and other agents and by having in place and publicizing a reporting system whereby em- 
ployees and other agents could report criminal conduct by others within the organization without fear 
of retribution. 

Recommendations by the Federal Sentencing Guidelines for an Effective Compliance Program 

• Appointing individuals to serve as ethics or compliance officers 

• Developing corporate credos and codes of ethics that effectively communicate an organization's ethical 
standards and expectations to employees. 

• Designing ethics training programs for all employees 

• Designing and implementing monitoring and auditing systems 

• Designing and implementing an effective system of punishments and sanctions. These must be accom- 
panied by investigative procedures that respect employee due process rights. 



116 CHAPTER 4. CG (CORPORATE GOVERNANCE) 

4,2,4 Textbox 2: Compliance Oriented Codes and Programs Versus Values Ori- 
ented Codes and Programs 

Compliance Strategy 

1. The initial and still probably the most prevalent method for responding to the Federal Sentencing 
Guidelines is the compliance strategy. This strategy is based on three interrelated components: 

2. Rules: Compliance strategies are centered around strict codes of ethics composed of rules that set 
forth minimum thresholds of acceptable behavior. The use of rules to structure employee action does 
run into problems due to the gap between rule and application, the appearance of novel situations, and 
the impression that it gives to employees that obedience is based on conformity to authority. 

3. Monitoring: The second component consists of monitoring activities designed to ensure that em- 
ployees are conforming to rules and to identify instances of non-compliance. Monitoring is certainly 
effective but it requires that the organiztion expend time, money, and energy. Monitoring also places 
stress upon employees in that they are aware of constantly being watched. Those under observation 
tend either to rebel or to automatically adopt behaviors they believe those doing the monitoring want. 
This considerably dampens creativity, legitimate criticism, and innovation. 

4. Disciplining Misconduct: The last key component to a compliance strategy is punishment. Pun- 
ishment can be effective especially when establishing and enforcing conduct that remains above the 
criminal level. But reliance on punishment for control tends to impose solidarity on an organization 
rather than elicit it. Employees conform because they fear sanction. Organizations based on this fear 
are never really free to pursue excellence. 

Values Orientation 

1. To facilitate comparison, three correlative but different elements to Values-Based or aspirationnal 
approaches will be identified. 

2. Development of Shared Values: Using a process similar to the one described above, a company 
develops a Statement of Shared Values. These provide guidelines that replace the hard and fast rules of 
a compliance code. Statements in values-oriented codes play a different logical function than statements 
in compliance codes. "Principles of Professional/Organizational Conduct" in compliance codes specify 
circumstances of compliance: time, agent, place, purpose, manner, etc. These provide sufficient content 
to set forth principles of professional conduct as rules that can be violated. This, in turn, allows them 
to be backed by punishment for violation. "Ideals of the Profession" (or organization) set forth a 
community's shared aspirations. These are pitched at a level well above and beyond the minimum. 
Communities can and should define themselves as much by their aspirations as by their threshold 
standards. 

3. Support for Employees: Since Statements of Values set forth excellences or aspirations, the role of 
the organization changes from monitoring and then punishing misbehavior to finding ways of opening 
avenues for employees to realize key values in their day to day activity. Excellence is not something to 
be reached overnight. It requires rethinking basic motivations, attitudes, beliefs, and goals. Companies 
need to identify obstacles to achieving ideals and then develop support structures to help those who 
seek to realize ideals. Values-based approaches change from punishing conduct that falls below the 
minimum to providing collective support to those who strive for the excellent. 

4. Locking in on Continual Improvement: The philosopher, John Dewey, characterizes moral re- 
sponsibility as the drive to better ourselves. The particular twist in Dewey's approach is to find ways of 
folding what has been learned from the past into meeting new challenges that arise in the future. This 
involves changing habits and, ultimately, changing character. Continual improvement is the ultimate 
goal of corporations oriented toward excellence. The values these "moral ecologies" identify structure 
and channel this endeavor. What is needed at this stage is to develop concrete programs and strategies 
for identifying obstacles to excellence, removing them, and remaining on track for excellence. 

5. To summarize, some companies identify a compliance strategy where they set forth rules that estab- 
lish minimum levels of acceptable conduct, monitor compliance, and punish non-compliance. Oth- 



117 

ers, value-oriented or aspiration-oriented companies, identify core values or aspirations (by reflecting 
on community values and finding them embedded in extant codes of ethics), develop programs and 
structures to support those who strive for these values, and work to lock in a program of continual 
improvement or betterment. 
6. Something to think about. Compliance approaches work best in what of company, organization 
or moral ecology. (Think about this in terms of the central or core commitments such as those in 
finance-, customer-, and quality-driven companies.) Values-based approaches work best in what kind 
of company, organization or moral ecology? How does one transition from compliance to values-based 
approaches? How does one integrate the two? 

4.2.5 Exercise 1: Evaluating the Pirate Credo 

Read the Pirate Credo. Then answer the following questions individually 

• What is good about the Pirate Credo? 

• What is bad about the Pirate Credo? 

• What is the purpose served by the Pirate Credo? For the Pirate Community? For non-members? 

4.2.6 Exercise 2: Developing Corporate Codes of Ethics 

1. Ethics Bowl Corporations. You have been assigned corporations corresponding to two of the six ethics 
bowl cases. For your presenting corporation, you will be developing a partial code of ethics. For the 
commenting corporation, you need to familiarize yourself with the moral ecology of the corporation, 
its needs, and be ready to comment on the code offered by another group. 

2. What kind of moral ecology is predominate in your corporation? Is it financial-, customer-, or quality- 
driven. Look at how the type of moral ecology structures other organizational activities: allocation 
of praise and blame, exchange of information, treatment of dissenting opinions, and central of moral 
concerns. All of these issues need to be addressed directly or indirectly in your code. 

3. What is the ethical challenge that is highlighted in the ethics bowl scenario based on your case. For 
this information go to the "Ethics Bowl in the Environment of the Organization" module. m21191. 

4. What functions are you addressing in your code outline? Looking above, these would include educate, 
inspire, create dialogue, discipline, empower, secure and express identity. 

5. Develop within the time available a sketch of a code. This could be a section of a compliance code, a 
corporate credo, or a statement of values. In choosing your form, think carefully about the function(s) 
of your code. Have something that you can present, informally, for around 3 to 5 minutes. 



4,2,7 Exercise 3: Evaluating Bona Fide Codes of Ethics 

Form small work teams of four to five individuals. Carry out the following fours steps and 
report your results to the rest of the group. 

1. Review a few sample codes per team. 

2. List the values you identify in the codes. Express each value as a word or in as few words as possible. 

3. Identify any recurring values. 

4. Record and post the list of values. 



118 CHAPTER 4. CG (CORPORATE GOVERNANCE) 

4.2.8 Exercise 4: Do a Statement of Values for Students at Your University 

In this third exercise, work with your group to develop a refined list of five to seven values. 
You can refine your list by integrating or synthesizing values, grouping specific values under 
more general ones, and integrating values into others as parts. Do your best to make your list 
comprehensive and representative. 

1. Brainstorm: list the values for your group. Keep in mind that values are multi-dimensional. For 
example, in the academic context, the values will break down into dimensions corresponding to stake- 
holder: faculty, students, administration, and other academic stakeholders. 

2. Refine: reduce your list to a manageable size (5-7). Do this by rewording, synthesizing, combining, 
and eliminating. 

3. Post: share your list with the entire group. 

4. Revise: make any last minute changes. 

5. Combine: a moderator will organize the lists into a ballot 

6. Vote: Each person ranks the top five values 

4.2.9 Exercise 5-Conveying Our Values: Crafting a Values-Based Code 

Each value in your Statement of Values needs to be accompanied by a Value Profile. Give a 
description of the value in everyday, non-technical terms. Think concretely. For example, those 
who exemplify your value behave in a certain fashion, exhibit certain commitments, pursue 
certain projects, and show certain attitudes and emotions. Try to think of general guidelines to 
keep in mind when working to realize your value. Finally, values challenge us because portray 
our aspirations. Think of specific ways values challenge us. For example, students may set for 
themselves the challenge of working responsibly in teams. They can further spell out what 
kinds of actions and attitudes this might require. Faculty members might set for themselves 
the challenge of grading more fairly. This could require actions like developing rubrics and 
refining exams to make them clearer. The purpose of this fourth exercise is to provide content 
to your statement of values and begin its implementation in your community. The following 
steps ennumerated below will help. 

1. Value: Responsibility 

2. Description: a responsible person is a person who... 

3. Principle: The faculty, students, and staff of the college of business Administration will... 

4. Commitments: Keep office hours, do your fair share in work teams, divide work into clear and 
coordinated tasks, tec. 



4,2,10 Exercise 6: Creating Awareness of the UPRM College of Business Admin- 
istration Statement of Values 

This exercise provides you an opportunity to study and discuss the UPRM College of Business Administration 
Statement of Values (available via the PREREQUISITE LINKS). Your task consists of the following tasks: 

• Read the entire UPRM CBA Statement of Values (individually) 

• Discuss the particular section/value assigned to your group and briefly describe what commitments or 
challenges does this value present for the students, faculty and/or staff of the CBA 

• List the most important commitments or challenges as precise and concise principles 



119 

4,2,11 Exercise 7: Assessing the UPRM College of Business Administration 
Statement of Values 

This exercise offers four scenarios in academic integrity. Your job is to discuss each scenario in terms of 
the values listed in the UPRM College of Business Administration Statement of Values (available via the 
PREREQUISITE LINKS). 

Marta Acevedo, a business administration student, has a report due tomorrow. She has been 
overwhelmed for the last few weeks with assignments from other classes and doesn't really 
have time to complete this exercise. She discovers that her roommate took this same class 
the previous semester and has a complete report on disk. She considers using her roommate's 
report. Should she? What would you do if you were her? 

• Is Marta threatening any of the values listed in the ADEM SOV? Which ones? 

• What can be done prevent this kind of problem from arising in the first place? Should Marta have 
planned her course load better when registering? Can teachers coordinate to prevent overloading 
students with the same deadlines? Whose fault is this? The students? The teachers? The system? 

• Can this problem be posed as a conflict between ADEM values and other values held by students and 
teachers? If so, what are values that are in conflict? How can these conflicts be addressed? 

• Do you think the ADEM SOV adequately addresses this problem? If not, how can it be improved? 

You are head of your department. A recent study has revealed that plagiarism, which is a 
university- wide problem, is especially bad in your department. Imagine your relief when a 
member of your faculty brings you his latest software project, a super-effective and compre- 
hensive anti-plagiarism software program. This program does everything. It detects subtle 
changes in style in student papers. Its new search engine quickly connects to existing online 
paper data bases, greatly expanding the ability of a professor to detect the sources from which 
their students have copied. Furthermore, it allows professors to upload papers and projects 
from past semesters and provides fast and flexible indexing to help them identify recycled stu- 
dent work. Professors can zero in on students using recycled papers, and the former students 
who have become their suppliers. Following the recent lead of Ohio State University, you can 
now revoke the degrees of past students who participate in this version of academic dishonesty. 
In short, this new and exciting software package allows you to monitor the work of present 
and past students to a degree thought impossible even in the recent past. "Plagiarism," your 
colleague tells you, "will now become a thing of the past." 

• Does this anti-plagiarism program threaten any of the values in the ADEM SOV? If so, which values? 

• Is the department chairperson treating students disrespectfully by adopting and implementing the anti- 
plagiarism software? Can faculty treat students disrespectfully as "justifiable" retaliation for student 
cheating and plagiaring? Do two wrongs make a right? 

• What is the cause of plagiarism? Do students do it out of ignorance of standards and practices of 
documentation and achnowledgment? Do they do it because they procrastinate until they do not have 
time to do the assignment properly? Do students resort to plagiarism because they have too many 
conflicting obligations such as family, job, large course loads, etc.? 

You teach an advanced course in Engineering Economics that has both graduate and under- 
graduate students. At the end of the semester the students turn in a group project that 
comprises 40% of their grade. One of the groups complains to you that only 4 out of the 5 
members have done any work. The fifth student, the one who allegedly has done no work, is 
an undergraduate. The others are graduate students. You talk with the undergraduate who 
claimed that she tried to involve herself in the group activities but was excluded because she 
was an undergraduate. What should you do? 



120 CHAPTER 4. CG (CORPORATE GOVERNANCE) 

• ADEM faculty have identified students not working together effectively in groups as a major concern. 
Do you find this a problem? What do you think are the causes of students not participating effectively 
in work groups? 

• Assume that the teacher in this case is committed to implementing the ADEM SOV. Which values are 
at play in this case? Design an action for the teacher that realizes these values? 

• Assume you are a member of this student work group. What can groups do to ensure that every member 
is able to participate fully? What do group members do to exclude individuals from participating? 

You are studying frantically for your exam in a computer engineering course. It will be very 
difficult. But your roommate, who is also taking the course and has the exam tomorrow, seems 
unconcerned. When you ask why, he tells you that he has a copy of the exam. Apparently, 
a group of students in the class found out how to hack into the professor's computer and 
download the exam. (They installed a Trojan horse called Sub-Seven into the professor's 
computer which allows unauthorized access; then they searched through the professor's files, 
found the exam and downloaded it.) Your roommate has the exam in his hand and asks you 
if you would like to look at it. What should you do? 

• A group of students in a computer ethics class created a survey that asked students if they would 
avail themselves of exams obtained through means such as that described in the scenario above. Sixty 
percent of the respondents said that they would. Compare this to the value commitments expressed in 
the ADEM SOV? Is there a gap between aspiration and behavior? What can be done to reduce this 
gap? 

• Suppose you took the exam. Would this have any long term effects on your character? Would acting 
dishonestly this time make it easier to do so in the future? 

• Suppose you wish to uphold standards of academic integrity in this case and not take the exam. Should 
you turn your roommate in to the teacher? Would keeping this exam theft a secret undermine any of 
the UPRM ADEM values? If so, which ones? 

You have now discussed some or all of the above cases in terms of the ADEM Statement of Values. What do 
you think are the strengths of this document? What are its weaknesses? Do you recommend any changes? 
What are these? 

Sources for Cases 

• Case 1 has been developed by William Frey, Chuck Huff, and Jose Cruz for their book, Good Com- 
puting: A Virtue Approach to Computer Ethics. This book is currently in draft stage and is under 
contract with Jones and Bartlett Publishing Company. 

• Cases 2 and 3 were developed by UPRM faculty teams from the College of Engineering during work- 
shops held for the ABET 2001 Steering Committee and the Department of Industrial Engineering. 
These workshops took place April 6, 2001 and May 14, 2001. 

• Case 4 has been modified from "The Plagiarism Detector" written by Moshe Kam. It can be found 
at the beginning of the ethics chapter in Practical Engineering Design, edited by Maja Bystrom and 
Bruce Eisenstein. Moshe Kam. "The Plagiarism Detector", in Practical Engineering Design, edited by 
Maja Bystrom and Bruce Eisenstein. Boca Raton, FLA: CFC Press, 2005: 27-28. 



121 

4,2,12 Assessment Tools 



Ethics Across the Curriculum Matrix 

This media object is a downloadable file. Please view or download it at 
<EACMatrix_Template_ADEM_Feb_17.doc> 

Figure 4.2: This table will help you document your class discussion of the ADEM Statement of Values. 



Muddy Point Exercise 

This media object is a downloadable file. Please view or download it at 

<MP.doc> 

Figure 4.3: Clicking on this media file will open a word format for the Muddiest Point Exercise. 
Students are invited to discuss the strongest and weakest facets of the ADEM Statement of Values. 



Module Assessment Form 

This media object is a downloadable file. Please view or download it at 

<MAP.doc> 

Figure 4.4: Clicking on this media file will open a general module assessment form taken from Michael 
Davis' IIT EAC workshop. This form will help you assess the SOV activity as well as other EAC modules. 



4.2.13 Bibliography 

1. Lynn Sharp Paine (1994) "Managing for Organizational Integrity," in Harvard business review, March- 
April: 106-117 

2. Gary R. Weaver and Linda Klebe Trevino (1999) "Compliance and Values Oriented Ethics Programs: 
Influences on Employees' Attitudes and Behavior," in Business Ethics Ethics Quarterly 9(2): 315-335 

3. Stuart C. Gilman (2003) "Government Ethics: If Only Angels Were to Govern," in Professioinal Ethics, 
edited by Neil R. Luebke in Ph Kappa Phi Forum, Spring 2003: 29-33. 

4. Stephen H. Unger (1994) Controlling Technology: Ethics and the Responsible Engineer, 2nd Edition. 
New York: John Wiley and Sons: 106-135. 

5. "Federal Sentencing Guidelines-Sentencing of Organizations," in Ethical Theory and Business, 5th 
Edition, edited by Tom L Beauchamp and Norman E. Bowie, New Jersey: Prentice Hall: 182-187. 
This article was reprinted with permission from The United States Law Week, Vol. 50 pp. 4226-29 
(March 26, 1991) (Bureau of National Afairs, Inc. 



122 CHAPTER 4. CG (CORPORATE GOVERNANCE) 

4.3 Pirate Code for Engineering Ethics 4 
4,3.1 Statements of Value/Codes of Ethics 



• William J. Frey 

• Center for Ethics in the Professions 

• University of Puerto Rico at Mayaguez 



4,3.2 Module Introduction 



In this module, you will learn about professional and occupational codes of ethics by looking at a bad code, 
writing your own code, and then critically examine a professional code of ethics, the engineering code for 
the Colegio de Ingenieros y Agrimensores de Puerto Rico. Three exercises will take you through the process 
of examining the Pirate Creed, writing your own code, and examining the Colegio's code. Text boxes will 
provide helpful background information on purposes served by professional codes, philosophical objections, 
and a framework for working your way through a stakeholder-based code like that of the CIAPR or the 
National Society of Professional Engineers. This module provides a Spanish translation of the Pirate Creed 
prepared by Dr. Dana Livingston Collins of the Department of Humanities in the University of Puerto Rico 
at Mayaguez. 

Concluding this module are two word documents uploaded as media files. One provides the exercises 
that are presented in this module in XML format. The other provides the background information that has 
been presented in this module as Textboxes. 

4.3.3 Module Activities 

1. You will analyze the Pirate Creed in terms of (a) its different functions, (b) the community values it 
embodies, and (c) how it stands toward nonmembers of the pirate community as well as members. 

2. You will write a code of ethics for an occupational or professional area such as business or engineering. 

3. You will debrief the rest of the class on your group's code, clarify its functions and values, and defend 
it if necessary. 

4. This module will conclude with a look at the code of ethics of the Puerto Rico State Society of 
Professional Engineers and Land surveyors or Colegio de Ingenieros y Agrimensores de Puerto 
Rico. 



4.3.4 Pirates Creed of Ethics (translated into Spanish by Dana Collins) 

1. El capitan tendra comando total durante una batalla y tendra la autoridad para dirigir el barco. El 
que no sigua al capitan podra ser castigado se la tripulacion no vota en contra del castigo. 

2. Si el barco naufraga, la tripulacion permanecera unidos hasta el capitan consigue otra nave. Si la nave 
es propiedad comun de la tripulacion, la primera nave capturada pertenecera al capitan con una (1) 
parte de botin. 

3. El cirujano del barco recibira doscientas (200) coronas para el mantenimiento de su equipo medico y 
recibira una (1) parte del botin. 

4. Los otros oficiales recibiran una (1) parte cada uno, y si se distinguen, la tripulacion determinara 
cuanto recibiran como recompensa. 

5. El botin de una nave capturada sera distribuido en partes iguales. 

6. El primero que senale la aparicion de un barco que sea capturado recibira cien (100) coronas. 

7. El que pierda un ojo, una mano, o una pierna mientras esta en servicio, recibira hasta seis esclavos o 
seiscientas (600) coronas. 



4 This content is available online at <http://cnx.Org/content/ml3849/l.10/>. 



123 

8. Los suministros y raciones seran compartidos por igual. 

9. La penalidad por traer una mujer disfrazada a bordo es la muerte. 

10. Si un hermano roba de otro, perdera su nariz u orejas. Se peca de nuevo, se le daran un mosquete, 
municiones, plomo y una botella de agua y sera abandonado en una isla. 

11. Si hay duda en una disputa entre hermanos, una corte de honor determinara el veredicto. Si un 
hermano es encontrado culpable, la primera vez sera perdonado, pero al ofender de nuevo, sera atado 
a un canon y recibira un latigazo de cada miembro de la tripulacion. El mismo castigo sera dado a 
todos, incluyendo oficiales, quienes se emborrachen al punto de perder sus sentidos mientras esten en 
el barco. 

12. El que se duerma mientras esta trabajando como centinela, recibiran latigazos por todos los miembros 
de la tripulacion. Se repite el crimen, su cabeza sera rajada. 

13. A todos quienes conspiren para desertar, o lo que hayan desertado y sean capturados, sus cabezas seran 
rajadas. 

14. Pelas entre varios hermanos mientras esten a bordo sera resueltos en tierra con pistolas y espadas. El 
que saque primera sangre sera el vencedor. No pueden golpear a otro mientras esten a bordo de la 
nave. 



4,3.5 Exercise 1: Pirate Creed 

• What is good about the Pirate Creed of Ethics? 

• what is bad about the Pirate Creed of Ethics? 

• What is the purpose of the Creed for the Pirate Community? 

• What values are embedded in the Pirate Creed 

• How does the Pirate Creed deal with nonmembers? 



4.3.6 Exercise 2: Writing a Code of Ethics for Engineers 

• Step One: Identify the purpose behind your engineering code of ethics. For example, is it to punish 
wrongful behavior, provide a set of guidelines, educate the community, support ethical behavior, or 
create an ethics dialogue? 

• Step Two: Identify the contributions that engineering makes to society. 

• Step Three: Identify the stakeholders of the engineering profession. A stakeholder is any group or 
individual with a vital or essential interest tied to what engineers do. along with these stakeholders, 
identify their stakes, that is, the goods, rights, interests or values that are maintained, promoted, or 
diminished by what engineers do? 

• Step Four: Enumerate the obligations or duties that engineers have toward each of these stakeholders. 
In other words, what can engineers do to maintain, promote, or diminish the stakes of each stakeholder? 

• Step Five: Identify the conflicting obligations that arise from the fact that engineers have different 
stakeholders who hold conflicting stakes? Do any of these stakeholders or stakes have obvious priority 
over the others? 

• Step Six: Step back and reflect on what you have written. For example, look for different kinds of 
provisions. Does your code use ideals of the profession which set forth the profession's central or 
cardinal objectives? Does your code contain principles of professional conduct which set forth 
minimal levels of behavior and prerscribe sanctions and punishments for compliance failures? In the 
CIAPR (Colegio de Ingenieros y Agrimensores de Puerto Rico) code of ethics, the fundamental 
principles and basic canons set forth the ideals of the profession. The principles of professional conduct 
fall in the section on practical norms. 

• Step Seven: The Final Audit. Submit your code to an overall audit to see if anything has been 
left out. Have you included all the stakeholders and their stakes? Have you left out any ethical 
considerations such as rights and duties? Compare your code to the law. Are your code's provisions 



124 CHAPTER 4. CG (CORPORATE GOVERNANCE) 

legal? Do they overlap with existing law? Do they imply criticisms of existing laws? If they imply 
punishments or sanctions, what measures does your code prescribe to administer justly and properly 
these sanctions? Finally, be sure to guard against the equal but opposite sins of over-specificity and 
too much generality. Overly specific codes try to provide a rule for every possible situation. Because 
this is impossible, these codes tend toward rigidity, inflexibility, and irrelevance. Codes that are too 
general fail because they can be interpreted to rationalize any kind of claim and, thus, mask immoral 
actions and intentions. 

4.3.7 Exercise 3: Studying the code of Ethics of the Colegio de Ingenieros y 
Agrimensores de Puerto Rico 

• Identify the provisions that touch upon the relation of the engineer to the public. What goods are at 
stake in this relation? What can engineers do to preserve or promote these goods? 

• Identify provisions that touch upon the relation of the engineer to the client. What goods are at stake 
in this relation? What can engineers do to preserve or promote these goods? 

• Identify provisions that touch upon the relation of the engineer to the CIAPR (professional engineering 
society) What goods are at stake in this relation? what can engineers do to preserve or promote these 
goods?. 

• Finally, identify provisions that touch upon the relation of the engineer to other engineers (peer rela- 
tions). What goods are at stake in this relation? What can engineers do to preserve or promote these 
goods? 

4.3.8 Textbox 1: Code of Ethics of Colegio de Ingenieros y Agrimensores de 
Puerto Rico (Puerto Rico State society of Professional Eng 

• The CIAPR code of ethics has three parts: 

• Part One: Three Fundamental Principles which express cardinal objectives for engineering practice in 
Puerto Rico 

• Part Two: Ten Canons which set forth general rules for ethical engineering practice 

• Part Three: Each canon is repeated followed by several practical norms, by setting forth detailed rules, 
practical norms specify and interpret the basic canons. They also set forth specific and concrete rules 
for professional and ethical conduct 

• The CIAPR code of ethics is a stakeholder code. This means it identifies engineering stakeholders, the 
goods they depend upon, and the duties engineers have in protecting or promoting these goods. 

Key Engineer Relations 

• The relation between engineer and public is founded on the goods of health, safety and welfare. 

• The relation between engineer and client is founded on the good of faithful agency (trust). 

• The relation between the individual engineer and the profession is founded on the engineer working 
to maintain the good reputation and integrity of the profession. 

• The peer relation between practicing engineers is founded on the good of collegiality. 

Engineer and Public 

• Duties arising in this relation are tied to maintaining or promoting the goods of health, safety, and 
welfare. They include minimizing harm, avoiding paternalism (making decisions for others who have 
the right and ability to make these for themselves), free and informed consent (the right of those taking 
a risk to consent to that risk). 

• FP1: Deberan considerar su principal funcion como profesionales la de servir a la humanidad. Su 
relacion como professional y cliente, y como professional y patrono, debera estar sujeta a su funcion 
fundamental de promover el bienestar de la humanidad y la de proteger el interes publico. 



125 

• Canon 1: Velar por sobre toda otra consideration por la seguridad, el ambiente, la salud y el bienestar 
de la comunidad en la ejecucion de sus responsabilidades profesionales. 

• Practical Norm Id: Cuando tengan conocimiento o suficiente razon para creer que otro ingeniero 
o agrimensor viola las disposiciones de este Codigo, o que una persona o firma pone en peligro la 
seguridad, el ambiente, la salud o el bienestar de la comunidad, presentaran tal information por escrito 
a las autoridades concernidas y cooperaran con dichas autoridades proveyendo aquella information o 
asistencia que les sea requerida. 

Engineer to Client 

• Duties stemming from this relation arise out of faithful agency, that is, the responsibility of an engineer 
to remain true to the client's interests. Positively this includes exercising due care for the client by 
carrying out the client's interests through the exercise of sound, competent engineering professional 
judgment. Negatively this entails avoiding conflicts of interest and revealing the client's confidential 
information. 

• Faithful Agency: Canon 4 — Actuar en asuntos profesionales para cada patrono o cliente como agentes 
fieles o fiduciarios, y evitar conflictos de intereses o la mera apariencia de estos, manteniendo siempre 
la independencia de criterio como base del profesionalismo. 

• Conflict of Interest: 4a — Evitaran todo conflicto de intereses conocido o potential con sus patronos 
o clientes e informaran con prontitud a sus patronos o clientes sobre cualquier relation de negocios, 
intereses o circunstancias que pudieran influenciar su juicio o la calidad de sus servicios. 

• Confidentiality: 4i — Trataran toda information, que les llegue en el curso de sus encomiendas pro- 
fesionales, como confidential y no usaran tal information como medio para lograr beneficio personal si 
tal action es adversa a los intereses de sus clientes, de sus patronos, de las comisiones o juntas a las 
que pudiera pertenecer o del publico. 

Engineer to Profession 

• This includes working to promote the profession's autonomy and independence as well as main- 
taining its good reputation. Moreover it requires that engineers participate in their professional 
society, work to advance engineering, be objective and impartial in their work, and associate only with 
persons of good reputation. 

• Canon 3: Emitir declaraciones publicas unicamente en una forma veraz y objetiva. 

• Practical Norm 3a: Seran objetivos y veraces en informes profesionales, declaraciones o testimonios. 
Incluiran toda la information relevante y pertinente en tales informes, declaraciones o testimonios. 

Engineer to Engineer 

• This relation is based on the good of Collegiality. It requires that engineers work to maintain friendly 
and collaborative relations with other engineers by avoiding disloyal competition and comparative 
advertising and by always giving peers due credit for their contributions to engineering projects and 
designs. 

• Practical Norm 41: Antes de realizar trabajos para otros, en los cuales puedan hacer mejoras, pianos, 
disenos, inventos, u otros registros, que puedan justificar la obtencion de derechos de autor o patentes, 
llegaran a un acuerdo en relation con los derechos de las respectivas partes. (Give due credit to 
colleagues for their work). 

• Canon 5: Edificar su reputation profesional en el merito de sus servicios y no competir deslealmente 
con otros. (Avoid disloyal competition) 

• Practical Norm 6b: Anunciaran sus servicios profesionales sin auto-alabanza y sin lenguaje en- 
ganoso y de una manera en que no se menoscabe la dignidad de sus profesiones. (Non-comparative 
advertising) 

• Practical Norm 5h: No trataran de suplantar, ni suplantaran otro ingeniero o agrimensor, despues de 
que una gestion profesional le haya sido ofrecida o confiada a este, ni tampoco competira injustamente 
con el. (Avoid disloyal competition) 



126 CHAPTER 4. CG (CORPORATE GOVERNANCE) 

4,3.9 Professional Codes as Social Contracts 

• What some have said about defining ethics could also be applied to defining a profession: it's a bit 
like "nailing jello to a tree." Nevertheless, we can make to reasonable claims about professions: tye 
can be treated as social contracts, and they have someting to do with specialized knowledge. If these 
two claims hold, then a third claim can be made, namely, that professions have an ineliminable ethical 
dimension. 

• A legitimate contract between two parties requires a quid pro quo (a mutually beneficial exchange) 
and free consent (consent that includes full information and excludes force or deception). The social 
contract between engineering and society can be pictured int he following way: 

Profession as Social Contract 



Society grants to Profession 


Profession grants to Society 


Autonomy 


Self-Regulation 


Prestige 


Primacy of public health, safety, and welfare 


Monopoly 


Developing and enforcing ethical and professional standards 



Table 4.4 

Society grants autonomy, prestige, and monopoly control to the profession of engineering. 

1. Autonomy includes freedom from regulation and control from the outside through cumbersome laws, 
regulations, and statutes. 

2. Prestige includes high social status and generous pay. 

3. Monopoly status implies that the profession of engineering itself determines who can practice engineer- 
ing and how it should be practiced. 

4. The profession promises to use its autonomy responsibly by regulating itself, it does this by developing 
and enforcing professional and ethical standards. By granting prestige to the profession, society has 
removed the need for the profession to collectively bargain for its self-interest. 

5. Not having to worry about its collective self-interest, the profession is now free to hold paramount the 
health, safety, and welfare of the public. 

6. This contract explains why professions develop codes of ethics. Codes document to the public the 
profession's commitment to carry out its side of the social contract, namely, to hold paramount public 
welfare. They can do this because society will honor its side of the contract, namely, to remove from 
the profession the need to fight for its self-interest 

This social contract is more symbolic and explanatory than real. 

• Codes allow the profession to document to society that it has developed proper standards and intends 
to enforce them. They express the profession's trust in society to keep its side of the bargain by 
granting autonomy, prestige, and monopoly. Of course this contract has never been explicitly enacted 
at a point in historical time. But the notion of a social contract with a mutually beneficial exchange 
(a quid pro quo) provides a useful device for modeling the relation that has actually evolved between 
society and its professions. 

Professions and Responsibility 

• Professions have been created to exercise stewardship over knowledge and skill domains. 

• Exercising stewardship over X generally means watching over, preserving, protecting, and even im- 
proving X. Stewardship is a forward-looking kind of responsibility similar to the responsibility that a 
parent exercises toward his or her children. The steward is a trusted servant or agent of the landowner 
who acts in the owner's place while the later is absent or incapacitated. 



127 

• "Stewardship," thus, refers to the profession's responsibility to safeguard its specific domain of knowl- 
edge and skill. This domain is essential to society in some way (it provides society with a basic, common 
good) and society delegates responsibility for this domain to its members who are specially suited to 
exercise it. 

• So, generally speaking, professions can be characterized in terms of epistemological and ethical respon- 
sibilities. 

• The epistemological responsibility refers to stewardship over the knowledge and skills that characterizes 
the profession. The profession preserves, transmit, and advances this domain of knowledge and skill. 
(Epistemology = study of knowledge.) 

• The ethical dimension refers to the responsibility of the profession to safeguard knowledge and skill 
for the good of society. Society trusts the profession to do this for the sake of the comnmon good. 
Society also trusts the profession to regulate its own activities by developing and enforcing ethical and 
professional standards. 

4.3.10 Objections to and Mischievous Side Effects of Codes of Ethics 

These objections are taken from John Ladd, "The Quest for a Code of Professional Ethics: An 
Intellectual and Moral Confusion." This article can be found in Deborah G. Johnson, editor, 
(1991) Ethical Issues in Engineering, New Jersey: Prentice Hall: 130-136. The author of this 
module has taken some liberties in this presentation. 

• Codes "confuse ethics with law-making" (Ladd, 130). Ethics is deliberative and argumentative 
while law-making focuses on activities such as making and enforcing rules and policies. 

• A code of ethics is an oxymoron. Ethics requires autonomy of the individual while a code assumes 
the legitimacy of an external authority imposing rule and order on that individual. 

• Obedience to moral law for autonomous individuals is motivated by respect for the moral 
law. On the other hand, obedience to civil law is motivated by fear of punishment. 
Thus, Ladd informs us that when one attaches "discipinary procedures, methods of adjudication and 
sanctions, formal and informal, to the principles that one calls 'ethical' one automatically converts them 
into legal rules or some other kind of authoritative rules of conduct...." (Ladd 131) Accompanying code 
provisions with punishments replaces obedience based on respect for the (moral) law with conformity 
based on fear of punishment. 

• Codes lead to the dangerous tendency to reduce the ethical to the legal. Ethical principles 
can be used to judge or evaluate a disciplinary or legal code. But the reverse is not true; existing laws 
cannot trump ethical principles in debates over ethical issues and ethical decisions. As Ladd puts it, 
"That is not to say that ethics has no relevance for projects involving the creation, certification and 
enforcement of rules of conduct for members of certain groups.. ..[I]ts [ethics's] role in connection with 
these projects is to appraise, criticize and perhaps even defend (or condemn) the projects themselves, 
the rules, regulations and procedures they prescribe, and the social and political goals and institutions 
they represent." (Ladd 130) 

• Codes have been used to justify immoral actions. Professional codes have been misued by 
individuals to justify actions that go against common morality. For example, lawyers may use the fact 
that the law is an adversarial system to justify lying. Ladd responds in the following way to this dodge: 
"{T}here is no special ethics belonging to professionals. Professionals are not, simply because they 
are professionals, exempt from the common obligations, duties and responsibilities that are binding on 
ordinary people. They do not have a special moral status that allows them to do things that no one 
else can." (Ladd 131) 

Mischievous Side-Effects of Codes (from John Ladd) 

• Codes make professionals complacent. (Ladd 135) First, they reduce the ethical to the minimally 
acceptable. Second, they cover up wrongful actions or policies by calling them-within the context 



128 CHAPTER 4. CG (CORPORATE GOVERNANCE) 

of the code-"ethical". For example, the NSPE code of ethics used to prohibit competitive bidding. 
Enshrining it in their code of ethics gave it the appearance of being ethical when in fact it was motivated 
primarily by self interest. This provision was removed when it was declared unconstitutional by the 
U.S. Supreme Court for violating the Anti-Trust law. 
• Because codes focus on micro-ethical problems, "they tend to divert attention from macro- 
ethical problems of a profession." (Ladd 135) For example, in Puerto Rico, the actions of the 
Disciplinary Tribunal of the Colegio de Ingenieros y Agrimensores de Puerto Rico tend to focus on 
individual engineers who violate code provisions concerned with individual acts of corruption; these 
include conflicts of interest, failing to serve as faithful agents or trustees, and participating in corrupt 
actions such as taking or giving bribes. On the other hand, the CIAPR does not place equal attention 
on macro-ethical problems such as "the social responsibilities of professionals as a group" (Ladd 132), 
the role of the profession and its members in society (Ladd 135), and the "role professions play in 
determining the use of technology, its development and expansion, and the distribution of the costs." 
(Ladd 135) 

4,3.11 Exercise: Questions for Reflection 

1. Which of Ladd's criticisms apply to the Pirate Creed? 

2. How does your group's code of ethics stand in relation to Ladd's criticisms? 

3. Do Ladd's objections apply t the ABET, NSPE, or CIAPR codes? 



WORD FILE 



This is an unsupported media type. To view, please see 
http://cnx.org/content/ml3849/latest/Code_EX_Bx_l.doc 



Figure 4.5: Module Exercises. 



4.4 Corporate Ethics Compliance Officer Report 5 

note: This module has been designed to bring together the following modules responding to 
the AACSB four ethics themes, corporate leadership, ethical decision-making, corporate social 
responsibility, and corporate governance. The links in this module tie it directly to EAC Toolkit 
modules that will help in preparation of the CEC0 report. The include the following: 

- Type or paste the content directly into the appropriate section 

- Socio-Technical Systems in Professional Decision Making (ml4025) 

- Developing a Statement of Values (ml4319) 



5 This content is available online at <http://cnx.Org/content/ml8646/l.l/>. 



129 

- Pirate Code for Engineering Ethics (ml3849) 

- Moral Ecologies in Corporate Governance (ml7353) 

- Three Views of Corporate Social Responsibility (ml7318) 

- Different Approaches to Corporate Governance (ml7367) 

These modules have links of their own that will prove invaluable for this activity. An example 
is the Leeds School of Business at the University of Colorado; this link connects to a search 
engine for finding codes of ethics and corporate social responsibility programs. 

The media file below provides a generic poster presentation template geared toward this assignment. 



Template for CECO Poster Presentation 



This is an unsupported media type. To view, please see http://cnx.org/content/ml8646/latest/Corporate 

Governance Presentation. pptx 

Figure 4.6: This media file provides a template of the poster presentation required for ADME 3405, 
the course "Corporate Leadership and Social Responsibility." The different sections can be filled in by 
preparing PowerPoint slides, pressing control + Print Screen when in presentation viewing mode, and 
copy-pasting into appropriate part of poster template slide. 



4.4.1 Introduction 

You are the CECO of your company. Being familiar with the requirements of Sarbanes-Oxley and the Federal 
Sentencing Guidelines, you have been charged with developing a comprehensive ethics program that includes 
(1) a socio-technical system study, (2) a corporate code of ethics, (3) an ethics training program for new and 
ongoing employees, (4) an ethics hotline or some other reporting mechanism, (5) a CSR (corporate social 
responsibility) challenge, and (6) recruitment and leadership strategies for implementing ethics. Your report 
will begin with an executive summary and end with a concluding section that discusses implementation 
issues and needs. 

4.4.2 What you need to know . . . 

Sections of CECO Corporate Ethics Report 

1. Executive Summary (1 page) 

2. Socio- Technical System Table plus written explanation. (3-5 pages) 

3. Corporate Code of Ethics that provides core values, a description of each value, and how you plan to 
disseminate and implement your code. (3-5) 

4. CSR (Corporate Social Responsibility) Challenge 

5. Description of Ethics Training Program including activities and required resources (3-5 pages) 



130 CHAPTER 4. CG (CORPORATE GOVERNANCE) 

6. Recruitment and Leadership Strategies for Implementing Ethics into your organization (3-5 pages) 

7. A Conclusion that includes a summary of the report, a time frame for implementing your ethics 
program, and an inventory of program needs and resources (1 page) 

4,4,3 What you will do ... 

Executive Summary 

The executive summary should be no more than one page. Expect to write this several times because it 
needs to be the clearest and best written section. Written for your CEO, it should provide a quick two 
minute summary of your ethics plan. Write it in active voice, use ordinary language, and make references 
throughout the summary to the sections of the report that provide more in-depth analysis of the issue at 
hand. In this section you will tell your reader what you are going to say in the report. 

Socio-Technical System 

• This section will provide both a table and written description to help your reader understand the socio- 
technical system in which your company works and which provides the ethical and social challenges to 
which your program will respond. 

• For information on how to compose a STS table and the different frames covered refer to module 
ml4025, Socio-Technical Systems in Professional Decision-Making. The table for Burger Man provides 
frames that will be most relevant to this module but there are also other STS tables adopted for use 
in power engineering and engineering practice in Puerto Rico. 

• Your written analysis should summarize and explore in more detail the STS issues that you are ad- 
dressing in your corporate ethics plan. These would include compliance issues as well as fields in which 
your corporation's aspirations could be realized. 

Corporate Code of Ethics 

• Your job here is to write a code of ethics for your corporation emphasizing the key value aspirations 
and CSR challenges that your are targeting in your ethics program. Your code should include... 

• The values that form your corporation's highest and central commitments. 

• A description or profile of each value. See the Developing a Statement of Values module for more on 
this. 

• How your values apply to both the corporation's stakeholders and to its key CSR challenges. 

• You should be clear about the function your code is playing both within your ethics plan and within 
the corporate organization. Six key functions are (1) to educate, (2) to foster an ethical dialogue, (3) to 
discipline employees, (4) to support employees in their efforts to realize the corporation's core commit- 
ments/values, (5) to communicate these commitments/values to employees and other stakeholders, and 
(6) to serve as a public testament of the key ethical and value commitments that define the integrity 
of your organization. 

Ethics Training Program 

• This section details how you educate employees on the key components of your ethics program including 
the core ethical and value commitments. It should also provide means for getting employee buy- in for 
the ethics program as well as components that help employees with special ethical challenges. It should 
include the following: 

• How you plan to educate employees on the company's code of ethics. 

• How the company's core ethical values and principles should be integrated in the company's key 
operations including setting policy, strategic planning and decision-making. 

• How your ethics program addresses your company's moral ecology. (Is it finance-, customer-, or quality 
driven? How do employees develop successful moral careers and modes of ethical advocacy within each 
of these companies? How does your ethics training program support this process?) 



131 

CSR Challenges 

• Several companies have special challenges in CSR. For example, Coca Cola when operating in India 
finds itself sharing scarce water resources with local, subsistence farmers. What are their responsibilities 
in this context? Relate your CSR challenge to the STS description in the second section. 

• Develop a response to this CSR challenge. How does this realize your company's key moral values? 

• Contextualize your company's CSR response within a general CSR perspective: shareholder, stake- 
holder, alliance. 

Recruitment and Leadership Strategies for Implementing Ethics 

• In this section you will describe how you will realize your core objectives in recruiting new employees 
and in developing a leadership style. 

• Consider, for example, how you will integrate values into the different components of your corporation's 
recruiting mechanism. Justice in the job description. Communicating to new employees their job and 
moral responsibilities. Recruiting employees who will be able to develop successful moral careers in 
the moral ecology of your company. 

• Recognizing and responding to ethical risks such as maintaining privacy and property. 

Conclusion 

In the executive summary, you have told your reader what you are going to say in this report. The main 
body of the report contains what you need to say. This final section tells the reader what you have said by 
recapitulating and summarizing the report's high points. Include a time frame for implementing your ethics 
program as well as a description of the program's needs. 

4,4,4 What did you learn? 
Check List 

• Each group will turn in this checklist, fully filled out and signed. Checking signifies that your group 
has completed and turned in the item checked. Failure to submit this form will cost your group 20 
points 

• Executive Summary 

• Socio- Technical System Table and Written Explanation 

• Code of Ethics 

• Ethics Training Program 

• Corporate Social Responsibility Challenge and Response 

• Recruitment and Leadership Strategies for Implementing Ethics 

• Conclusion 

Group Self Evaluation Requirements 

• Group Self-Evaluation Form including... 

• a list of the goals your group set for itself 

• a carefully prepared, justified, and documented assessment of your group's success in reaching 

these goals 

• a careful assessment of what you did and did not learn in this activity 

• a discussion of obstacles you encountered and the measures your group took to overcome these 

• a discussion of member participation and contribution including the member contriution forms 

• a general discussion of what worked and what did not work for you and your group in this 

activity 
• Each member will turn in a filled out a Team Member Evaluation Form. This form can be 

accessed through the media file listed above. It is suggested that you do this anonomously by turning 

in your Team Member Evaluation Form in a sealed envelop with the rest of these materials. You are 



132 CHAPTER 4. CG (CORPORATE GOVERNANCE) 

to evaluate yourself along with your teammates on the criteria mentioned in the form. Use the scale 
suggested in the form.Your first item here 

Team Member Evaluation Form 



This is an unsupported media type. To view, please see http://cnx.org/content/ml8646/latest/TEAM 

MEMBER RATING SHEET.docx 



Figure 4.7: This Team Member Evaluation Form must be filled out by each team member. Evaluate 
yourself and each member in terms of the criteria. It is preferable if you do this anonymously. 



Group Pledge 

• I certify that these materials have been prepared by those who have signed below, and no one else. 
I certify that the above items have been checked and that those items with check marks indicate 
materials that we have turned in. I also certify that we have not plagiarized any material but have 
given due acknowledgment to all sources used. All who sign below and whose names are included on 
the title page of this report have participated fully in the preparation of this project and are equally 
and fully responsible for its results. 

• Member signature here 

• Member signature here 

• Member signature here 

• Member signature here 

• Member signature here 

• Member signature here 

4.4.5 Appendix 

4.4.6 EAC ToolKit Project 

4.4.6.1 This module is a WORK-IN-PROGRESS; the author(s) may update the content as 
needed. Others are welcome to use this module or create a new derived module. You can 
COLLABORATE to improve this module by providing suggestions and/or feedback on your 
experiences with this module. 

Please see the Creative Commons License 6 regarding permission to reuse this material. 

4.4.6.2 Funded by the National Science Foundation: "Collaborative Development of Ethics 
Across the Curriculum Resources and Sharing of Best Practices," NSF-SES-0551779 

4.5 Being an Ethical Job Candidate 7 
4.5.1 Module Introduction 

Chances are that you are either actively involved in an effort to find work or soon will be. Based on stories that 
come from the job-hunting experiences of UPRM students in Practical and Professional ethics classes, this 



6 http://creativecommons.org/licenses/by/2.0/ 

7 This content is available online at <http://cnx.Org/content/ml4468/l.7/>. 



133 

module presents the employment guidelines put out by the IEEE, challenges these guidelines with realistic 
cases and scenarios, and provides you with decision-making tools to tackle these ethical complexities. This 
module was developed for and recently presented in Mechanical Engineering Capstone Design courses. It 
forms a part of the EAC Toolkit funded by the National Science Foundation, SES 0551779. 

The details of the IEEE Professional Employment Guidelines for Engineers and Scientists have been 
reprinted by Stephen Unger in his book, Controlling Technology: Ethics and the Responsible Engineer, 2nd 
Ed. NY, NY: John Wiley and Sons, Inc.: 315-329. We condense these guidelines to a few concepts. Each 
concept will be presented and followed by one or more cases designed to test the concept in its application. 

4,5.2 Sincere Interest 

• Job candidates are obliged to apply only for those positions in which they are sincerely and seriously 
interested. 

• "Sincere interest" has several meanings but two stand out here. First, they should not agree to an 
interview after having accepted a job offer from another company. Second, they should be qualified 
according to the requirements listed in the job application. 

• The following scenarios test this concept in different ways. "Bring Your Friends" raises the issue of 
whether not being seriously interested in a job is ok if the interviewer knows this and initiates the 
interview for other reasons. "Working for Mega Weapons" asks whether moral or conscience-based 
conflicts cancel out "sincere interest." 

1. Bring Your Friends: 

Maria, a talented student in mechanical engineering has accepted an offer to work for a prestigious firm. 
Then she receives a call for an interview with firm X. She tells them that she has already accepted an offer 
from Y, but the caller says that doesn't matter. "We want to interview you anyway so that we can document 
affirmative action compliance. In fact, if you have any friends who are similarly situated [i.e., women who 
come from minority groups] please give us their names. We will fly all of you to our central headquarters for 
interviews at our expense. It will be a good vacation. 

What would you do if you were in Maria's place? 

• Accept the interview offer but not try to recruit any of your friends. 

• Accept the interview offer and try to recruit some of your friends to go along. 

• Refuse to accept the interview on moral grounds. 

• Refuse to accept the interview because it would interfere with the class in Practical and Professional 
Ethics that you are currently taking. 

• Report this company to the appropriate governmental agency since they are clearly distinguishing 
against candidates from so-called minority groups 

• Your solution.... 

2. Working for Mega Weapons 

Jorge is an unemployed computing professional. He is also a pacifist. Antonio, a friend, has a job prospect. 
Mega Weapons is looking for someone with Jorge's expertise. Yes, he will be spending time developing the 
guidance systems for "smart bombs." But the accurate, smart bombs will be less likely to go astray and 
kill innocent civilians. Jorge, however, remains unimpressed by this. "They're still bombs," he says, "and 
their primary purpose is to kill human beings. Besides, I would compromise myself by even accepting an 
interview. What if they ask me about my views on war? I would have to tell them the truth and then 
they would dismiss me as a candidate." Jorge tells his wife about the job prospect. While she supports 
his pacifism, she tells him that she can't continue indefinitely as a waitress; her job is preventing her from 
completing her college degree and keeps her away from the children. She asks Jorge if there is any way he 
can reconcile this job with his pacifism. What should Jorge do? 

What should Jorge do is he receives a request to interview with Mega Weapons? 



134 CHAPTER 4. CG (CORPORATE GOVERNANCE) 

• Jorge should not go to the interview because he is not "sincerely interested" in this position. His 
pacifism cancels out any possibility of "sincere interest". 

• Jorge should accept this interview request because his obligations to his family outweigh matters of 
personal morality and personal conscience such as his pacifism. 

• Jorge should accept this interview and a job offer, if one follows, precisely because of his pacifism. If 
he refuses then Mega Weapons will find a war monger who will do all kinds of harm. By taking the 
job and using his skills to minimize harm in weapons development Jorge is doing his best to realize 
the pacifist agenda. 

• Jorge should set aside his pacifism and use his engineering skills to carry out politically sanctioned 
weapons projects just as a doctor should set aside personal likes or dislikes of a patient and exercise 
his or her skills dispassionately and professionally. 

• Your solution... 



4,5.3 Full and Honest Disclosure 

• The job candidate is required to provide full information relative to the job description as advertised. 
This would include elements such as: 

• Educational Experience 

• Prior work experience 

• Other job relevant skills and knowledge 

• Do religion, sexual preference, marital status, political viewpoints, and recreational practices constitute 
job relevant matters? In other words, are these matters private to the job candidate or are there 
occasions when the prospective employer has a right to access this information? 

• Distinguish between information to which an interviewer has a right and the means the interviewer 
has the right to use to uncover this information. Do interviewers have the right to require that job 
candidates (1) take polygraph examinations, (2) undergo drug tests, (3) take psychological profiling 
exams, (4) be subjected to "staged crises" to find out how a candidate would handle such an event? 
These may constitute information areas to which the prospective employer has a right, but does the 
interviewer also have a right to use these means to obtain this information? 

The following scenario examines whether full disclosure requires that one make known one's 
personal moral convictions. 

3. Are You a Bleeding-Heart Pacifist? 

Jorge is a pacifist. He is also an unemployed computing professional. Against his better judgment, his wife 
and friend, Antonio, have talked him into interviewing with Mega Weapons for a new opening working on the 
guidance systems of non-nuclear missiles. During the interview, the employer remarks that Mega Weapons 
has had trouble in the past with employees who have moral qualms about working on weapons projects. He 
then turns to Jorge and asks, "You're not one of those bleeding-heart pacifists are you?" How should Jorge 
answer this question? 

• Jorge should not reveal his pacifism. It is obvious that this would prejudice Mega Weapons against 
hiring him. He must try to get the job at all costs. 

• Jorge should take the time to explain his pacifism, and how he sees himself fitting into different 
military projects. For example, he could emphasize his concern and expertise in making weapons 
guidance systems as accurate as possible to minimize "collatoral" damage during use. He could use 
this interview to negotiate guidelines for projects that he would find compatible with his convictions. 

• Jorge should immediately exit the interview. It is obvious that Mega Weapons would exhibit no 
sympathy or support for his pacifism. 

• Your solution. 



135 

4,5.4 Moral Conflicts and Full and Honest Disclosure 

Consider this Analogy 

You are a physician on call for Saturday night in a remote country hospital. You receive an emergency call to 
come immediately and perform, life-saving surgery on a patient in critical condition. The surgery is routine 
for someone of your skills but the situation for the patient is critical. You can save his life if you act quickly. 
You speed to the hospital, scrub, suit up and walk into the operating room. There lying unconscious on 
the operating table is your worst enemy. This is a person whose entire life has been devoted to making you 
miserable. You have no doubt that if you save his life he will continue to inflict even more suffering on you. 
You hesitate. You could botch the operation and probably get away with it. But no one else can perform 
the surgery. You successfully execute the operation and save the patient's life. After all, as a physician you 
have the obligation to set aside personal issues and feelings and do your duty as a professional to the best 
of your abilities. 

The general consensus is that the doctor is morally, professionally, and even legally obligated to perform 
the operation. Professionalism, most argue, requires that we set aside personal issues and personal morality 
and do our duties as professionals. Samuel Florman argues that engineers as professionals have the same 
duty by analogy. If society asks an engineer to carry out a task that is socially sanctioned and politically 
validated, then the engineer has the duty to set aside whatever moral or conscience-based objections he or 
she may have and carry out the engineering activity. So even those who are pacifists and object to weapons 
projects may have, under the right conditions, the obligation or duty to set aside personal morality and 
work on the project. Do you think Florman's analogy holds? Put yourself into the position of Jorge? Does 
he have the obligation to set aside his pacifism as a merely personal belief and carry out his orders as an 
engineer? 

Here is the central part of Florman's argument from analogy quoted from his article, "Moral 
Blueprints" (Harper's, October 1978, pp. 0-33): 

If each person is entitled to medical care and legal representation, is it not equally important that each 
legitimate business entity, government agency, and citizens' group should have access to expert engineering 
advice? If so, then it follows that engineers (within the limits of conscience) will sometimes labor on behalf 
of causes in which they do not believe. Such a tolerant view also makes it easier for engineers to make a 
living. 
What do you think Florman means by "within the limits of conscience"? 

Nathaniel Borenstein a widely respected expert on intelligent systems found himself under just this kind 
of situation. A committed pacifist, he assiduously avoided getting involved in military projects, even when 
asked repeatedly by representives of the military. But something said to him by one of these military 
representatives led him to reassess his position. Borenstein was asked to develop a training simulation to 
teach individuals how to work with the nuclear missile launching system. When he found that it involved 
"embedded training" he became very concerned. To appreciate the full extent of his concern and the reasons 
that persuaded him to get involved in this project, it is best to turn to his own words: 
Borenstein on Embedded Training 

Embedded training, in particular, struck me as a very poor idea. Training by computer simulation has been 
around for a long time. Embedded training takes this one step further: it does the simulation and training 
on the actual command and control computer. To exaggerate slightly, whether or not anyone actually dies 
when you press the "launch missiles" button depends on whether or not there is a little line at the top of 
the screen that says "SIMULATION." 
Borenstein continues 

Such a system seems almost designed to promote an accidental nuclear war, and this thought was what 
persuaded me to attend the workshop in the first place. One can all too easily imagine human error-"I could 
have sworn it was in the 'simulation' mode-as well as frightening technical possibilities. Perhaps, due to 
some minor programming bug, the word "SIMULATION" might fail to disappear when it was supposed to. 
Someone approaching the computer would get the wrong idea of what it was safe to type. 



136 CHAPTER 4. CG (CORPORATE GOVERNANCE) 

These quotes are taken from: Nathaniel S. Borenstein, "My life as a NATO collaborator" in 
the Bulletin of the Atomic Scientists, April 1989: 13-20. 

A Thought Exercise 

• Think of Borenstein's concerns and eventual actions in light of Florman's analogy. 

• Does Borenstein have the obligation to set aside his pacifism to work on correcting this training 
problem? 

• Does Florman's analogy provide the justification for this? Or is Borenstein acting on the basis of a 
very different set of arguments? 

• Assume that you are a committed pacifist. Was Borenstein right to set aside his beliefs to work on 
this project? Did he really set aside his beliefs? 

4.5.5 Honoring Confidentiality Agreements and Waiving Employment Rights 

• More and more, prospective job candidates are being required to sign "non-disclosure agreements" as 
a part of their employment contract. These agreements commit engineers and professionals, not only 
to non-disclosure of company secrets, but to not seeking employment with competitors for three to five 
years after leaving the company. 

• Non-disclosure agreements are designed to balance an employer's concern for protecting confidential 
information with an employee's right to job mobility based on freedom of association. But a new and 
vital concern to engineers and professionals on the point of employment is just what they are commiting 
themselves to when they agree to such contractual provisions. 

• The prospective employee's responsibility to honor confidentiality agreements is grounded in the em- 
ployer's obligation to full disclosure of the terms of employment. Balancing these is difficult in the 
interviewing and hiring processes as the following cases demonstrate. 

• New employees are also being asked to sign agreements waiving their right to sue the company should 
they be fired. In lieu of the right to sue for wrongful dismissal, companies ask that employees agree 
to binding arbitration carried out by an outside arbitrator. Binding arbitration is. ..binding, that is, it 
obligates both of the disputing parties to a decision decided upon by an outsider. And the company 
reserves the right to name the arbitrator. Companies have done this to protect themselves against the 
erosion of the doctrine of "employment at will" toward the notion of "just cause." But the scenarios 
below invites you to think about how much job candidates are being asked to give up when they waive 
their right to sue for wrongful dismissal. 

4. We Protect Our Property 

Pedro has a job offer from Z-Corp, a manufacturer of computer chips. Z-Corp has recently had problems 
with its competitors who have tried to hire away its employees to get information about their chip production 
process. In response, Z-Corp now includes a clause (non-disclosure agreement) in its employment contract 
that prohibits employees from working with competitors for up to five years. Should Pedro be concerned 
about this? What should he do? 

What should Pedro do? 

• He should refuse to sign such an agreement even if it costs him the job. 

• He should sign the agreement without complaint. It's a nasty world out there, and he is lucky to have 
this job. 

• Pedro should ask the company to be more explicit about the confidentiality concerns they are trying 
to protect. He should also ask whether it is necessary to restrict his future employment options to such 
an extent. 

• Your solution.... 

5. You Can't Sue Us 

Marta, a student at an Hispanic university has just accepted a job with a major U.S. corporation. The 
job seems ideal. However, she notices that her employment contract includes a clause to the effect that she 



137 

cannot sue the corporation for wrongful dismissal should she be fired or laid off. Instead, the dispute would 
be resolved by an outside arbitrator. The arbitrator's decision would be binding on both parties. Moreover, 
the arbitrator would be chosen by the company. Marta suspects that this agreement represents a "hard line" 
stance that the company has taken on wrongful dismissal suits. What should she do? 

What should Marta do? 

• She should refuse to agree to waiving any of her legal rights. Not to do so would leave her vulnerable 
to being fired by the company for any reason whatsoever, even morally questionable reasons. 

• She should ask for more time to study the employment contract before signing. Then she should exam- 
ine very carefully the company's past employment issues. Maybe the company's record is questionable 
and this has led them to take such a stance toward wrongful dismissal suits. 

• Marta should ask for more time to think about the employment offer and the contractual terms. Then 
she should try to find another position and only if she fails in this effort should she accept the offer as 
the best thing she can do. 

• Your solution.... 

6. Can I use what I have already learned? 

Mega Weapons, Inc. (MW) has been awarded a lucrative contract with the U.S. military to develop guided, 
non-nuclear missiles. This contract is based on MWs considerable success in developing highly accurate 
computer guidance systems. While working with MW, you have had access to the details of these guidance 
systems, including information owned by MW and protected by the law. Recently, you have received a job 
offer from Amaco Arms, Inc. (AA). This offer came about through an unsolicited recommendation by a 
former classmate of yours; he now works for Amaco, is familiar with your experience and expertise, and 
suggested to his supervisors at Amaco that they try to hire you away from Mega Weapons. You will be 
helping them develop guidance systems for missiles and will be doing work similar to the work you are doing 
with Mega Weapons. AA competes directly with ME for military weapons contracts. It is more than likely 
that protected information you have had access to while working with Mega Weapons would be useful for 
what you would be doing with Amaco. 

What would you do if you were in this position> 

• You should accept the new job. After all, your classmate has done you a favor. It's a lot more money, 
and you are certainly in a position to help AA. 

• You should not accept this job offer since it is clear that your former classmate and A A are only 
interested in the proprietary and confidential information you have about MW. 

• You should accept the job but only after you have done two things. First, you need to consult with 
MW to define precisely the boundaries of your confidentiality obligations. Then you should make these 
boundaries clear to AA and only if they accept these boundaries should you agree to work for them. 

• Your solution.... 

7. You Can't Take It With You 

You are leaving Computing Systems, Inc. to work for Compware, Inc,. a competitor. Before you leave 
Computing Systems, you are debriefed by the Personnel Office and a company lawyer on the proprietary 
information you have had access to while working with Computing Systems. They have itemized the infor- 
mation that you cannot divulge to or use in your work with Compware. It is your professional judgment 
that they are including information that is general knowledge and should not be considered confidential or 
proprietary. It is also information that would be useful — even essential — for what you will be doing in your 
new job. You feel that this confidentiality agreement is overly restrictive and would handicap you in your 
new job. What should you do? 

How should you respond to CSI's restrictions on what you can and cannot disclose in your 
new work with Compware? 

1. You should assert your rights to make use of all the information that your training has provided you. 
This includes especially the innovations you introduced to CSI. Because this is the result of your hard 
work you should be able to take it with you to your new job. 



138 CHAPTER 4. CG (CORPORATE GOVERNANCE) 

2. Even though CSI's confidentiality boundaries are, in your opinion, restrictive, you have no choice but 
to accept them. Make these boundaries clear to Compware and hope that they still want your services. 

3. You need to consult a lawyer here. Clearly CSI is trampling on your legal rights but you will need 
expert help to assert them. 

4. Your solution.... 



4.5.6 More on Full and Honest Disclosure: Terms of Interview 

Full Disclosure also pertains to providing full disclosure of the terms of the interview as well 
as full disclosure of the terms of employment should the search reach this point. 

• Full disclosure would include providing the job candidate with a detailed itinerary of the interview 
process. As we will see in the case below, some interviewers deliberately leave off certain items to 
create surprises. 

• Full disclosure of the nature of the job should include a detailed description of routine activities as well 
as non-routine possibilities. An example of a significant non-routine task would be that occasions may 
arise where an employee may at some point be called upon to work on a weapons project. 

• In short, the job candidate should be given, during the interview, an orientation on work responsibilities, 
places in which the work will be carried out, and the colleagues with whom he or she will be working. 

8. Oh, by the way... 

Pedro, who will graduate at the end of the current semester, is a student at a well known Hispanic serving 
university. He and two of his classmates are flown by Comp-Org for an interview at company headquarters. 
During a phone conversation with the company representative setting up the interview, he asks if there 
is anything he should do to prepare for the interview. The company representative answers, "No." Pedro 
receives a faxed itinerary of the interview-it looks routine. So Pedro and his classmates board the plane and 
arrive at their destination, the company headquarters. The company official who meets them at the airport 
tells them that the first item on the interview agenda is a drug test. When Pedro objects-"Why weren't we 
told about this before we agreed to the interview?"-he is told that if this is unacceptable to him, he can get 
right back on the plane because the interview is over for him. 

What should Pedro do? 

• He should get on the plane. This act on the part of the interviewer violates his right of prior disclosure 
of the terms of the interview. 

• He should submit to the drug test. After all, he should have reasonably expected that the company 
would do something like this. Since whether or not he has a drug habit is highly job relevant, the 
company has a right to this information. 

• He should file a grievance against the company for discriminating against Hispanics. 

• Your solution.... 

Employers should also treat information about job candidates and employees as confidential 

In the following case, examine whether information about why a former employee with your company had 
been fired is or is not confidential and should or should not be included in any recommendation you write 
for that employee. 

9. The Recommendation 

A worker under your supervision has recently been fired for incompetence and repeated violations of con- 
fidentiality. Several weeks later, the worker returns to ask you for a letter of recommendation. He says you 
owe it to him; you fired him and he has not been able to find any work and has a family to support. 

What should you do? 

1. Write the letter and withhold information about the employee being fired. While he may be a slacker, 
you should help him as a means of helping his family. 



139 

2. Write the letter but include the information about the employee being fired. If you frame it properly, 
maybe he will get a job and be able to support his family. 

3. Refuse to write a letter. If you leave out what the prospective employer considers crucial information 
you may be liable for any harm this slacker causes. And you wouldn't be doing the former employee 
any favor in writing the letter because you would be wrong to conceal information about his being 
fired. 

4. Your solution.... 

Finally, interviewers and employers have the obligation to treat job candidates and employees 
with dignity. This includes respecting privacy and refraining from harassment. The following 
case raises interesting questions about just what constitutes harassment during an interview. 

• A recent graduate from University X, Marta has a strong and successful interview with a representative 
from a local, respected company. She discussed her skills, experience, and asked several perceptive 
questions about working conditions, job responsibilities, and benefits. The interviewer, obviously 
impressed, asked Marta back for a second interview with his supervisor. 

• The second interview followed a different course. The interviewer, an older man, did not ask her about 
her skills or experience. Instead he reminisced about his days as a college student. He talked about his 
children-what they were studying and their career plans. He mentioned his wife in passing. Then he 
told Marta that the people who do well in his company are hard workers. "The strongest person," he 
said, "will do whatever is necessary to survive in a harsh, competitive environment." Then he looked 
at her hands and asked if she was single and if she still lived with her parents. 

• How should Marta answer these questions? 

• Do these questions invade Marta's privacy? 

• Do the interviewer's questions, comments, and gestures constitute sexual harassment? 

4,5.7 Decision Making Exercise and Ethics Tests 

Your Task 

• You will be divided into groups and assigned a scenario. 

• Each scenario involves a difficulty with interpreting and applying an employee guideline concept. 

• Interpret and apply the concept as best you can. 

• Develop a value integrative solution that resolves the decision point of your scenario. 

Values 

• Value: A value "refers to a claim about what is worthwhile, what is good. A value is a single word 
or phrase that identifies something as being desirable for human beings." Brincat and Wike, Morality 
and the Professional Life: Values at Work 

• Justice: Justice as fairness focuses on giving each individual what is his or her due. Three senses of jus- 
tice are (1) the proper, fair, and proportionate use of sanctions, punishments and disciplinary measures 
to enforce ethical standards (retributive justice), (2) the objective, dispassionate, and impartial distri- 
bution of the benefits and burdens associated with a system of social cooperation (distributive justice), 
(3) an objectively determined and fairly administered compensation for harms and injustices suffered 
by individuals (compensatory justice), and (4) a fair and impartial formulation and administration of 
rules within a given group. 

• Respect: Recognizing and working not to circumvent the autonomy in others and ourselves. (Au- 
tonomy is the capacity to make and execute decisions as well as to set forth ends and goals, integrate 
them into life plans, and use these to constitute active identities.) Respect involves recognizing and 
respecting rights such as privacy, property, free speech, due process, and free (and informed) consent. 
Disrespect undermines autonomy through deception, force, or manipulation. 



140 CHAPTER 4. CG (CORPORATE GOVERNANCE) 

• Responsibility: The ability to develop moral responses appropriate to the moral issues and problems 
that arise in one's day-to-day experience. Responsibility includes several senses: (1) individuals are 
(capacity) responsible when they can be called upon to answer for what they do; (2) individuals have 
(role) responsibilities when they commit to carry out tasks that arise from social and professional roles; 
(3) responsibility also refers to the way in which one carries out one's obligations. It can range from 
indifference and negligence to care and diligence. Responsibility in this sense turns into a virtue that 
formulates diligence and care as excellences worth striving for. 

• Honesty - Is honesty telling the truth, the whole truth, and nothing but the truth? Or is it a virtue 
that involves a more delicate balance between extremes of excess and defect? Too much honesty results 
in harmful bluntness and tactlessness. ("Your child is a hopeless slob. You should disown him." The 
former may be true but there are gentler and ultimately more productive ways to communicate this 
information to the concerned parent.) We are all familiar with too little honesty, the dishonesty that 
results from lying, deceiving, manipulating, exaggerating, distorting, etc. 

• Reasonableness - Defusing disagreement and resolving conflicts through integration. Characteristics 
include seeking relevant information, listening and responding thoughtfully to others, being open to 
new ideas, giving reasons for views held, and acknowledging mistakes and misunderstandings. Thus, 
reasonableness as a virtue includes much more than rationality. (From Michael Pritchard, Reasonable 
Children) 

In making your decision... 

1. Try to design a solution that realizes as many values as possible. 

2. Wike: "Although values can compete, they don't conflict." Try to solve the value competitions in your 
scenario by integrating the competing values in a solution. 

3. Wike: "No value necessarily overrides any other." 

4. Wike: "Aim to realize all values, but where that is impossible, enact the most important values and/or 
the greatest number of values." 

Having Trouble? Try this... 

1. Nolo Contendere. Take the path of least resistance. (Just go along with what the dominant person 
in the situation says.) 

2. Negotiate. Try to persuade those in the situation to accept a value-integrative solution, compromise, 
or trade off. 

3. Oppose. Someone is trying to force you to so something wrong. Get some courage. Oppose the 
wrongdoer. 

4. Exit. You can't win in this situation so find a way of getting out. Let someone else deal with it. 

5. These options can be evaluated and ranked in terms of the values they realize (or don't realize) and 
how feasible they are in the given situation. 

Try these ethics tests 

1. REVERSIBILITY: Would I think this a good choice if I were among those affected by it? 

2. PUBLICITY: Would I want this action published in the newspaper? 

3. HARM: Does this action do less harm than any available alternative? 

4. FEASIBILITY: Can this solution be implemented given time, technical, economic, legal, and political 
constraints? 



4,5.8 References 

1. Victoria S. Wike, "Professional Engineering Ethical Behavior: A Values-based Approach". Proceed- 
ings of the 2001 American Society for Engineering Education Annual Conference and 
Exposition, Session 2461. 



141 

2. Michael S. Pritchard (1996) Reasonable Children: Moral Education and Moral Learning. 

Lawrence, KS: University of Kansas Press: 11. 

3. Stephen H. Unger (1994) Controlling Technology: Ethics and the Responsible Engineer. New 
York: John Wiley and Sons: 315-325 (Reprinted with permission of IEEE) 

4. Robert C. Solomon (1999) A Better Way to Think About Business: How Personal Integrity 
Leads to Corporate Success. Oxford, UK: Oxford University Press: 71-114. 

5. See Onlineethics, www.onlineethics.org, for case on which "Oh, By the Way" is based. 



4.5.9 Conclusion 

What have you achieved? 

1. You have become aware of how ethical issues can arise in the job candidacy process. 

2. You have a better of your obligations and rights in the job candicacy process. 

3. You have practiced decision making by evaluating and ranking solutions to ethics cases. 

4. You have worked with integrating important ethical values into solutions to ethical problems. 

4.5.10 Presentation of Module before Mechanical Engineering Class 

Presentation: Being an Ethical Job Candidate 



This is an unsupported media type. To view, please see 
http://cnx.org/content/ml4468/latest/Be_Et_Job_V2.ppt 



Figure 4.8: This figure contains a powerpoint presentation of this module used in a Mechanical Eng 
neering Capstone Design course during Spring and Fall semesters, 2007. 



Gray Matters in Job Searches 



This is an unsupported media type. To view, please see http://cnx.org/content/ml4468/latest/Gray 

Matters in Job Searches.doc 



Figure 4.9: This word file presents four of the above scenarios in Gray Matters form. It provides a 
useful handout as well as an abbreviated version of this activity. 



142 CHAPTER 4. CG (CORPORATE GOVERNANCE) 



Chapter 5 

Business Ethics Case Studies 

5.1 Biomatrix Case Exercises - Student Module 1 

HOW TO EDIT: Write your module for a student audience. To complete or edit the sections 
below erase the provided textual commentaries then add your own content using one or more of 
the following strategies: 

- Type or paste the content directly into the appropriate section 

- Link to a published CNX module or an external online resource 
using the ''Links'' tabs (see example on the right) 

- Link to a document or multimedia file within the content after 
uploading the file using the ''Files'' tab (see example below) 

- Cite content not available online 

Word Version of this Template 

This media object is a downloadable file. Please view or download it at 
< EAC TK STD TEMPLATE.doO 

Figure 5.1: This is an example of an embedded link. (Go to "Files" tab to delete this file and replace 
it with your own files.) 



5.1.1 Introduction 

In this module you will study a real world ethical problem, the Biomatrix case, and employ frameworks based 
on the software development cycle to (1) specify ethical and social problems, (2) generate solutions that 
integrate ethical value, (3) test these solutions, and (4) implement them over situation-based constraints. 
This module will provide you with an opportunity to practice integrating ethical considerations into real 



1 This content is available online at <http://cnx.Org/content/ml5187/l.8/>. 

143 



144 CHAPTER 5. BUSINESS ETHICS CASE STUDIES 

world decision-making and problem-solving in business and computing. This whole approach is based on an 
analogy between ethics and design (Whitbeck). 

Large real world cases like Biomatrix pivot around crucial decision points. You will take on the role of 
one of the participants and problem-solve in teams from three such points. Problem-solving in the real world 
requires perseverance, moral creativity, moral imagination, and reasonableness. These skills are developed 
through practice. Designing and implementing solutions requires identifying conflicting values and interests, 
balancing them in creative and dynamic solutions, overcoming technical limits, and responding creatively to 
real world constraints. 

Each decision point requires that you take up the position of a participant and work with the frameworks 
from this standpoint. You may be tempted to back out and adopt an evaluative posture from which to 
judge the participants. Resist this temptation. This module is specifically designed to give you practice in 
making real world decisions. These skills emerge when you role-play from a standpoint within within the 
case. You will learn that decision-making requires understanding your situation and taking responsibility 
for it. 

Cases such as Biomatrix are challenging because of the large amount of information gathering and sorting 
they require. Moral imagination responds to this challenge by providing different framings that help to filter 
out irrelevant data and structure what remains. Framing plays a central role in problem specification. For 
example, Biomatrix could be framed as the need to develop quick and decisive responses to cyber-smear. Or 
it could be framed legally as employing legal tools (John Doe suits to pierce anonymity) that set a dangerous 
precedent against free speech. Yet again, it could be framed as a cautionary tale on the dangers of thinking 
that you are anonymous when you speak online. What is important at this stage is that you and your group 
experiment with multiple framings of the case. This will open up new horizons of solution possibilities not 
available under just one framing. 

Tackling large cases in small teams also helps develop the communication and collaboration skills that 
are required for group work. Take time to develop strategies for dividing the work load among your team 
members. The trick is to distribute equally but, at the same time, to assign tasks according the different 
abilities of your team members. Some individuals are better at research while others excel in interviewing 
or writing. Also, make sure to set aside time when you finish for integrating your work with that of your 
teammates. Start by quickly reviewing the information available on the case. This is called "scoping the 
case." Then formulate specific questions to focus further research on information relevant to your problem 
solving efforts. This includes information pertinent to constructing a socio-technical analysis, identifying key 
"embedded" ethical issues, and uncovering existing best and worst practices. 

A case narrative, STS (socio-technical system) description, and two ethical reflections have been published 
at http://computingcases.org. This module also links to websites on free speech and privacy law, advice to 
corporate officials on how to respond to cyber-smear, and information useful in understanding the products 
manufactured by Biomatrix. 

5.1.2 Case Narrative and Supporting Documents 

Biomatrix Abstract 

Biomatrix manufactures a medical product called Synvisc, a lubricant injected into the knee to take the 
place of natural lubricants that disappear with age. Synvisc was developed in the late 1990s to help patients 
suffering osteoarthritis, a condition that leads to immobility in the knee caused by the disappearance of 
natural lubricating fluids and the deterioration of the cartilage that cushions the knee's movement. As 
individuals age the natural chemical lubricants in the knee lose their elasticity. Synvisc is designed to slow 
this process. Manufactured from the comb of roosters, it mimics the chemical structure and properties of 
the knee's natural lubricants. Injected into the knee in a treatment called visco supplementation, it provides 
patients with immediate though temporary relief from osteoarthritis. In many cases it has helped postpone 
difficult and painful knee surgery. 

Cybersmear 



145 

• From April 1999 to August 2000, three individuals posted over 16,000 messages critical of Bioma- 
trix in a financial discussion forum provided by Yahoo. Using 23 pseudonyms, they made several 
unsubstantiated claims: 

• that Synvisc produces harmful side effects 

• that Biomatrix covered up negative financial and product information 

• that Biomatrix and its corporate officials had connections to the Mafia 

• that the publicly announced friendly merger between Biomatrix and Genzyme was a ruse and would 
never take place 

• that the CEO of Biomatrix was under investigation by famous Nazi hunter, Simon Wiesenthal, for 
crimes committed in Germany during the second world war 

• that a top level Biiomatrix corporate officer routinely sexually harassed employees 

The Outcome 

All of these claims were successfully refuted during legal proceedings initiated by Biomatrix. Yet this 
false information may have had a negative impact on the financial well being of the company. During the 
period in which the messages appeared in Yahoo, Biomatrix stock dropped from 35 to 21 dollars per share. 
Other factors may have contributed to this loss. (Biomatrix mentions difficulties with FDA regulations and 
protecting its patents in its report to the Security Exchange Commission.) But Biomatrix took direct legal 
action to stop the flow of negative information, find those responsible, and seek compensatory and punitive 
damages. They initiated a John Doe lawsuit that asked the court to subpoena Yahoo to identify the authors 
of the defamatory messages. Yahoo complied revealing two former Biomatrix employees, Raymond Costanzo 
and Ephraim Morris. A third participant, Richard Costanzo who was Raymond's twin brother, was also 
identified. These three, who called themselves the BXM Police, failed to substantiate the claims they made 
in their 16,000 messages. Biomatrix legal counsel petitioned the court for summary judgment. On August 
2, 2000, the court found Costanzo, Costanzo, and Morris guilty of defamation. 



5.1.3 Biomatrix Chronology 



Biomatrix Chronology 



Date 


Event 


Actors 


April 1999 through August 2000 


Posting of anti-Biomatrix mes- 
sages 


Richard Costanzo, Raymond 
Costanzo, Ephraim Morris 


April 1999 to July 2000 


Biomatrix Shares drop from 35 to 
21 


Caused by BXM Police? 


March 2000 


Announcement of Genzyme's in- 
tention to buy Biomatrix for 
$245,000,000 


Biomatrix and Genzyme Top 
Management 


June/July 2000 


Initiation of John Doe Lawsuit 


Plaintiffs: Biomatrix, Balazs, 
and Denlinger 


July 2000 


Court subpoenas Yahoo for iden- 
tities of message posters (BXM 
Police) 


Plaintiffs: Biomatrix, Balazs, 
and Denlinger 


continued on next page 



146 



CHAPTER 5. BUSINESS ETHICS CASE STUDIES 



August 3, 2000 


Summary Judgment against 
Raymond Costanzo, Richard 
Costanzo, and Ephraim Morris 


Plaintiffs: Biomatrix, Balazs, 
and Denlinger 


November 7, 2000 


SEC approval of Genzyme plan 
to purchase Biomatrix 


Genzyme and Biomatrix Top 
Management plus SEC 


November 7, 2000 


Biomatrix stock rises from $19 to 
$19.94 




January 3, 2001 


Yahoo alters bulletin board poli- 
cies 





Table 5.1: Case events from April 1999 to January 2001 



Short Selling 



One of the motives behind the defamatory posting may have been short selling. The following is an 
explanation of how it works from Zlotnick v. Tie Communications, 86 F.2nd 818-820 (3rd Cir. 1988): 
Where the traditional investor seeks to profit by trading a stock the value of which he expects to rise, 
the short seller seeks to profit by trading stocks which he expects to decline in value. . ..Short selling is 
accomplished by selling stock which the investor does not yet own; normally this is done by borrowing 
shares from a broker at an agreed upon fee or rate of interest. At this point, the investor's commitment 
to the buyer of the stock is complete; the buyer has his shares and the short seller his purchase price. 
The short seller is obligated, however, to buy an equivalent number of shares in order to return the 
borrowed shares. In theory, the short seller makes this covering purchase using the funds he received 
from selling the borrowed stock. Herein lies the short seller's potential for profit: if the price of the 
stock declines after the short sale, he does not need all the funds to make his covering purchase; the 
short seller then pockets the difference. On the other hand, there is no limit to the short seller's 
potential loss: if the price of the stock rises, so too does the short seller's loss, and since there is no 
cap to the stock's price, there is no limitation on the short seller's risk. There is no time limit on this 
obligation to cover. 



Short Selling: Step by Step 

• Consider how investor Z can profit from 100 shares of stock X that he borrows from broker A: 

• 1. Z borrows 100 shares of X from A at a certain time, Tl (say Monday, October 11, 2004). X is worth 
$10 a share at this time so 100 shares of X are worth $1000. 

• 2. Z immediately sells these 100 borrowed shares of X at its market value of $10 per share or $1000. 
This still occurs within time frame, Tl. 

• 3. Z opens an account with Yahoo and starts spreading false rumors about the financial health of X on 
Yahoo's financial bulletin board. He uses several usernames, copies the same message over and over, 
and creates the illusion that X is going down the tubes: 

• By c smear/cl smear/c smearrr/etc. All people who run corporation X are lying 
thieve~s OUT TO STEAL YOUR MONEY. They also DRESS FUNNY too. So SHUN 
THEM LIKE THE PLAGUE! SELL YOUR STOCK, even if you have to take a loss. 

• 4. Through cyber smear, Z lowers the price of X to $9 a share. 

• 5. Z then buys back 100 shares of X at T2 at its new value of $9 a share for a total of $900. 

• 6. Z gives back the 100 shares of X that he borrowed to dealer A. 

• 7. Z pockets the difference between the value of 100 shares of X at Tl ($1000) and its reduced value 
at T2 ($900). He has just made $100 by short selling stock. 

• 8. But there are two small problems. First, the ISP (Yahoo) used by Z is required to reveal his IP 
address if it receives a subpoena from the court. Second, defamation, specifically libel, is illegal. 



147 

5.1.4 Slander = Whistle Blowing by Meddra 2k 

The following is a BXM posting on Yahoo's Finance Bulletin Board. It was posted 4/11/00 and accessed 
8/10/2000. 

• BMX Police as Whistle-Blowers. The Biomatrix Police presented themselves as social crusaders out 
to prevent Biomatrix from harming innocent investors. They claimed that Biomatrix would try to 
undermine their claims by accusing them of slander whereas in truth they (the BMX Police) were 
altruistically motivated individuals blowing the whistle on internal corporate wrongdoing. In the 
following, meddra_2k argues that what Biomatrix officials call slander is really whistle-blowing, i.e., 
the public revelation of true information designed to avoid a public harm: 

• SLANDER = WHISTLE BLOWING 

• By meddra_2k 

• It all depends which side of the fence you're on. The "pusher" sees the negative information, factual as 
it may be, as "slander" because they feel that anything that might make stock go down is inherently 
wrong. Thus, they call it "slander". The BMX Police know that the TRUTH, as unpleasant as it may 
be, is NEVER wrong. Indeed, it is our CIVIC DUTY to expose the TRUTH about Biomatrix, its 
products, and its stock. Thus, we call it "whistle blowing." 

• The readers of this board are free to evaluate both sides, and their motives for posting, and decide 
what they wish to do. Some will learn that this is a SCAM company peddling a SCAM product and 
run for the door. 

• Others may not mind that it's a SCAM company peddling a SCAM product as long as the stock price 
goes up. Certainly, there are enough unethical people out there that won't mind investing in a SCAM 
that hurts people as long as they profit from it. 

• This message board is FILLED with such people. Fortunately, it also has a few do-gooders that help 
balance the EVIL that men do. 



5.1.5 What you need to know . . . 

5.1.5.1 What you need to know about socio-technical systems 

1. STS have seven broad components: hardware, software, physical surroundings, peo- 
ple/groups/roles, procedures, laws, and data/data structures. 

2. Socio-technical systems embody values 

• These include moral values like safety, privacy, property, free speech, equity and access, and security. 
Non-moral values can also be realized in and through Socio Technical Systems such as efficiency, cost- 
effectiveness, control, sustainability, reliability, and stability. 

• Moral values present in Socio Technical Systems can conflict with other embedded moral values; for 
example, privacy often conflicts with free speech. Non-moral values can conflict with moral values; 
developing a safe system requires time and money. And, non-moral values can conflict; reliability 
undermines efficiency and cost effectiveness. This leads to three problems that come from different 
value conflicts within Socio Technical Systems and between these systems and the technologies that 
are being integrated into them. 

• Mismatches often arise between the values embedded in technologies and the Socio Technical Sys- 
tems into which they are being integrated. As UNIX was integrated into the University of California 
Academic Computing STS (see Machado case at Computing Cases) , the values of openness and trans- 
parency designed into UNIX clashed with the needs of students in the Academic Computing STS at 
UCI for privacy. 

• Technologies being integrated into Socio Technical Systems can magnify, exaggerate, or exacerbate 
existing value mismatches in the STS. The use of P2P software combined with the ease of digital 
copying has magnified existing conflicts concerning music and picture copyrights. 



148 CHAPTER 5. BUSINESS ETHICS CASE STUDIES 

• Integrating technologies into STSs produces both immediate and remote consequences and impacts. 

3. Socio-technical systems change 

• These changes are bought about, in part, by the value mismatches described above. At other times, 
they result from competing needs and interests brought forth by different stakeholders. For example, 
bicycle designs, the configuration of typewriter keys, and the design and uses of cellular phones have 
changed as different users have adapted these technologies to their special requirements. 

• These changes also exhibit what sociologists call a "trajectory", that is, a path of development. Tra- 
jectories themselves are subject to normative analysis. For example, some STSs and the technologies 
integrated into them display a line of development where the STS and the integrated technology are 
changed and redesigned to support certain social interests. The informating capacities of computing 
systems, for example, provide information which can be used to improve a manufacturing processes 
can or to monitor workers for enhancing management power. (See Shoshanna Zuboff, The Age of 
the Smart Machine 

• Trajectories, thus, outline the development of STSs and technologies as these are influenced by internal 
and external social forces. 

In this section, you will learn about this module's exercises. The required links above provide information on 
the frameworks used in each section. For example, the Socio- Technical System module provides background 
information on socio-technical analysis. The "Three Frameworks" module provides a further description of 
the ethics tests, their pitfalls, and the feasibility test. These exercises will provide step by step instructions 
on how to work through the decision points presented above. 
For more information see Huff and Jawer below. 
Decision Point One: 
You are the publicist for the company Biomatrix, a manufacturer of biotechnology products including 
Synvisc, a promising treatment for osteoarthritis. The CEO, Endre Balazs, and Vice President, Janet 
Denlinger, come to you. It seems that they are quite upset. Biomatrix and its top level employees have 
become the victims of cyber-smear. Dozens of messages have appeared in the highly visible Yahoo Financial 
Bulletin Board that make the following unsubstantiated accusations: 

• Synvisc (a product manufactured by Biomatrix) produces seriously harmful side effects 

• Biomatrix has deceived its stockholders by suppressing negative financial and product information 

• Biomatrix and its employees have connections to the mafia 

• Company public releases that the merger between Biomatrix and Genzyme is friendly are false. In 
fact, the messages allege that the merger will never take place because of Biomatrix's terrible financial 
profile 

• Biomatrix CEO is under investigation by famous Nazi hunter, Simon Wiesenthal, for crimes he allegedly 
committed in Germany during the Second World War 

• Biomatrix Vice President requires sexual favors from employees under her supervision as a condition 
for promotion 

None of these charges is true. But Balazas and Denlinger are devastated by the personal attacks made upon 
them. Biomatrix also stands to lose a great deal from the negative publicity. Allegations of side effects from 
using Synvisc, a promising new produce patented by the company, threaten to drive the product out of the 
market. The recently announced friendly merger between Biomatrix and Genzyme has produced modest 
gains in stock prices but the cyber slanderers seem determined to drive Biomatrix stock value down. 

You have been charged by Balazs and Denlinger, as publicist, with designing a rapid and 
effective campaign against this cyber-smear. Several issues have arisen that demand your 
immediate attention: 

1. The identity of the cyber-slanderers is unknown. What can you do, if anything, to find out who these 
individuals are? 



149 

2. One of the slanderers claims to have worked for Biomatrix in the past. He/she uses this to lend credence 
to the attacks made on the company and its managers. If true, is there anything that can be done to 
prevent future employees from resorting to slander as a way of retaliating against the company? 

3. If the real identities of the individuals posting the Yahoo messages are revealed, should they be sued? 
What are the advantages of defamation lawsuits if those sued do not have the financial resources to 
compensate the victim for damages suffered? 

4. Should the cyber-slanderers be attacked? If so, how? How, in general, should corporations and their 
managers respond to cyber-slander? By publicly refuting the messages? By ignoring these attacks? 
By ignoring them until they produce clear damage? Or by responding quickly and proactively before 
they produce damage? 

Decision Point Two: Defending Against Defamation: 

The cat is out of the bag. The BXM Police, those self-styled whistle-blowers against the corporate greed of 
Biomatrix, have been revealed as Richard and Raymond Costanzo and Ephraim Morris. (Richard Costanzo 
and Ephraim Morris were former Biomatrix employees.) These are the real world names behind the 23 
pseudonyms under which 16,000 anti-Biomatrix emails were posted on the Financial Bulletin Board of Yahoo 
between April 1999 and August 2000. These messages accused Biomatrix managers of sexual harassment 
and Nazi war crimes and Biomatrix of corporate greed. 

Biomatrix managers feel that the company has a problem if its former employees find the 
motivation to behave in this manner. You are a human resource official in the Biomatrix 
and it has fallen on you to design a strategy and program to prevent a reoccurrence of this 
cyber-smear disaster. What should you do? 

• Bring a defamatory lawsuit against the three? Would this help to recoup damages? What other 
benefits could a successful defamation lawsuit bring? What would be the downside of such an action? 

• Alter the way in which employees are let go. (In other words develop procedures for firing or laying 
off employees that would defuse the desire to get even.) What could be done to sever a relation with 
an employee in as good a fashion as possible? 

• What steps could be taken to reduce the possibility of a former employee taking a "short selling" 
strategy? For example, could steps be taken to restrict the ways in which former employees use the 
confidential information they have about the company? Could risk identification measures be taken to 
uncover those who could or are benefiting from short selling a company's stock? 

• Could Human Resources develop an effective program to counter cyber smear by effective communi- 
cation of true and accurate information? How can a good reputation be established that could serve 
as a basis for counter-acting defamation? 

• In short, design a strategy for Biomatrix that could minimize the risk of future cyber-smear attacks 
and/or minimize the impact of these attacks. Defend your strategy in the Ethics Bowl debate. 

Decision Point Three: How far does free speech go? 

You work with a public service organization devoted to the defense of free speech, both off and online. For 
this reason you immediately noticed a newspaper story that three individuals, Richard Costanzo, Raymond 
Costanzo, and Ephraim Morris, were found guilty in a summary judgment of defamation. It seems they 
published, under 23 psuedonyms, some 16,000 messages that made negative claims against Biomatrix and 
its managers that they were unable to substantiate. 

The claims made by these individuals in their emails were pretty strong: 

• Biomatrix's most popular product, Synvisc, has produced significant harmful side effects and the com- 
pany has taken wrongful measures to suppress this information. Synvisc is a manufactured substance 
that resembles the natural fluids that lubricate knee movements. These fluids disappear with age pro- 
ducing a condition called osteoarthritis. Synvisc has been presented as a highly promising treatment 
for this problem. 

• They also accuse Biomatrix of covering up that fact that they are targets of potentially damaging 
lawsuits. 



150 CHAPTER 5. BUSINESS ETHICS CASE STUDIES 

• These three individuals, who style themselves the BXM Police, also accuse the company of covering 
up negative, harmful information about their upcoming merger with Genzyme. The messages claim 
that inside information reveals that the merger will never take place. 

• The BXM police also accuse Biomatrix top management of having committed war crimes and acts of 
sexual harassment. 

During pre-trial depositions, the accused were unable to substantiate any of these claims. While the motives 
for posting these messages have never been made clear three stand out: revenge, short selling, and the 
perception that rules of defamation did not apply in cyber space. You have been asked by your organization 
to contact the BXM Police and propose that they appeal this decision. You and your organization think 
that there are strong legal and ethical arguments, based on the right to free speech, that need to be put 
forth in this case. Your job in this decision point is to set forth these legal and moral arguments. In other 
words, construct a comprehensive defense for the BXM Police. 

Important Considerations 

• EPIC (Electric Privacy Information Center) and the ACLU (American Civil Liberties Union) present 
an amici curiae (friend of the court brief) outlining their concerns about the use of John Doe lawsuits 
to pierce online anonymity. This brief is summarized in the Biomatrix case materials. 

• Perhaps the strongest case for Free Speech is made by John Stuart Mill in On Liberty. Consult this 
book and find his argument in the first chapter. The summary of this argument in the Biomatrix case 
materials will help. Do defamation lawsuits suppress free speech. Why does Mill think that it is wrong 
to suppress even completely false speech? 

• Did Biomatrix and its management team suffer damages as a result of the Yahoo messages? What 
is this damage? What evidence proves that the damage was caused by the negative speech and not 
something else? Who bore the burden of proof in the summary judgment against the BXM Police? 

• What is the strongest argument that Biomatrix made against the speech of the BXM three? How can 
you and organization counter this argument? 

• The strongest argument the BXM Police offer for their actions is that they are not bound by rules of 
veracity and defamation while operating pseudonymously online. Should we be held responsible for 
what we say online? In the same way that we are held responsible off line? Doesn't Yahoo's disclaimer 
to readers that they should not assume that what they read is true suffice to exculpate those who post 
false speech? 

• It has been suggested that the BXM Police were motivated by greed. Their speech was designed to 
lower the price of Biomatrix stock so they could profit from short selling it. Does this change you 
defense? There is also inconclusive evidence that they were not acting alone? Does this change your 
defense? 



5.1.6 What you will do ... 

In this section, you will learn about this module's exercises. The required links above provide information on 
the frameworks used in each section. For example, the Socio- Technical System module provides background 
information on socio-technical analysis. The "Three Frameworks" module provides a further description of 
the ethics tests, their pitfalls, and the feasibility test. These exercises will provide step by step instructions 
on how to work through the decision points presented above. 

5.1.7 Exercise One: Problem Specification 

In this exercise, you will specify the problem using socio-technical analysis. The STS section of the Biomatrix 
Case narrative (found at Computing Cases) provides a good starting point. In the first table, enter the 
information from the Biomatrix case materials pertinent to the general components of a STS, its hardware, 
software, physical surroundings, people/groups/roles, procedures, laws, data. Some examples taken from 
the STS description at Computing Cases are provided to get you started. Then, using the second table, 



151 

identify the values that are embedded in the different components of the STS. For example, PICS (platforms 
for internet content selection) embody the values of security and privacy. Finally, using the data from your 
socio-technical analysis, formulate a concise problem statement. 
Exercise la: 

Read the socio-technical system analysis of the Biomatrix case at http://computingcases.org. Fill in the 
table below with elements from this analysis that pertain to your decision point. 

Socio- Technical System Table 



Hardware 



Software 



Physical 
Surround- 
ings 



People/Groups/tRobffliures 



Laws, 

Codes, 

Regulations 



Data and 
Data Struc- 
tures 



Plant man- 
ufacturing 

Synvisc 



Yahoo soft- 
ware 



cyber vs real 
space 



Biomatrix, 

Genzyme, 

Yahoo 



Getting 

a Yahoo 

account 



John Doe 

Lawsuits 



OSP user in- 
formation 



Table 5.2 



Instructions for Table 1: 



1. Go to http://computingcases.org and review the STS description provided for the Biomatrix case. 

2. Pull out the elements of the STS description that are relevant to your decision point. List them under 
the appropriate STS component in the above table. 

3. Think about possible ways in which these components of the Biomatrix STS interact. For example, 
what kinds of legal restrictions govern the way data is collected, stored, and disseminated? 

4. Develop your STS table with an eye to documenting possible ethical conflicts that can arise and are 
relevant to your decision point. 

Exercise lb 

Examine the values embedded in the STS surrounding this decision point. Locate your values under the 
appropriate component in the Biomatrix STS. For example, according to the STS description for Biomatrix 
found at Computing Cases, the Yahoo software that structures the architecture of the bulletin boards embody 
certain values like free speech. Should this be changed given the threat of defamation? What are Yahoo 
responsibilities in the context of defamation? 



Value Table 



Hardware 


Software 


Physical 
Surround- 
ings 


People/Group 


S/tRobffliures 


Laws/Codes/' 


ligaia^iData 
Structures 


Security 














Privacy 














Property 














continued on next page 



152 



CHAPTER 5. BUSINESS ETHICS CASE STUDIES 



Justice (Eq- 
uity/Access) 














Free Speecy 















Table 5.3 



Instructions for Table 2: 



1. This module links to another Connexions module, Socio- Technical Systems in Professional Decision- 
Making. There you will find short profiles of the values listed in the above table: security, privacy, 
property, justice, and free speech. These profiles will help you to characterize the values listed in the 
above table. 

2. Look for value conflicts or mismatches. For example, free speech in the Yahoo discussion space could 
conflict with laws that protect against defamation. How are these laws transferred online? 

3. Identify those components of the Biomatrix STS that embody or embed value. For example, list the 
values realized and frustrated by the software components discussed in the Biomatrix case in the STS 
description. 

4. Look for ways in which different elements of the STS that embed value can interact and produce 
value conflicts. These conflicts are likely sources for problems that you should discuss in your problem 
statement and address in your solution. 

Exercise lc: 

Write out the requirements (ethical and practical) for a good solution. Identify the parts of the STS that 
need changing. Then, develop a concise summary statement of the central problem your decision point 
raises. As you design solutions to this problem, you may want to revise this problem statement. Be sure to 
experiment with different ways of framing this problem. 

Harris, Pritchard, and Rabins provide a useful approach to problem specification. See refer- 
ences below. 

5.1.8 Exercise Two: Solution Generation 

Generate solutions to the problem(s) you have specified in Exercise 1. This requires that... 

• each member of your group develop a list of solutions, 

• the group combines these individual lists into a group list, and... 

• the group reduces this preliminary list to a manageable number of refined and clarified solutions for 
testing in the next stage. 

Helpful Hints for Solution Generation 



1. Solution generation requires proficiency in the skills of moral imagination and moral cre- 
ativity. 

Moral imagination is the ability to open up avenues of solution by framing a problem in different ways. 
Toysmart could be framed as a technical problem requiring problem-solving skills that integrate ethical 
considerations into innovative designs. Moral creativity is the ability to formulate non-obvious solutions 
that integrate ethical considerations over various situational constraints. 

2. Problems can be formulated as interest conflicts. In this case different solution options are 
available. 

• Gather Information. Many disagreements can be resolved by gathering more information. Because 
this is the easiest and least painful way of reaching consensus, it is almost always best to start here. 
Gathering information may not be possible because of different constraints: there may not be enough 
time, the facts may be too expensive to gather, or the information required goes beyond scientific or 



153 

technical knowledge. Sometimes gathering more information does not solve the problem but allows for 
a new, more fruitful formulation of the problem. Harris, Pritchard, and Rabins in Engineering Ethics: 
Concepts and Cases show how solving a factual disagreement allows a more profound conceptual 
disagreement to emerge. 

• Nolo Contendere. Nolo Contendere is latin for not opposing or contending. Your interests may 
conflict with your supervisor but he or she may be too powerful to reason with or oppose. So your only 
choice here is to give in to his or her interests. The problem with nolo contendere is that non-opposition 
is often taken as agreement. You may need to document (e.g., through memos) that you disagree with 
a course of action and that your choosing not to oppose does not indicate agreement. 

• Negotiate. Good communication and diplomatic skills may make it possible to negotiate a solution 
that respects the different interests. Value integrative solutions are designed to integrate conflicting 
values. Compromises allow for partial realization of the conflicting interests. (See the module, The 
Ethics of Team Work, for compromise strategies such as logrolling or bridging.) Sometimes it may 
be necessary to set aside one's interests for the present with the understanding that these will be taken 
care of at a later time. This requires trust. 

• Oppose. If nolo contendere and negotiation are not possible, then opposition may be necessary. 
Opposition requires marshalling evidence to document one's position persuasively and impartially. It 
makes use of strategies such as leading an "organizational charge" or "blowing the whistle." For more 
on whistle-blowing consult the discussion of whistle blowing in the Hughes case that can be found at 
computing cases. 

• Exit. Opposition may not be possible if one lacks organizational power or documented evidence. Nolo 
contendere will not suffice if non-opposition implicates one in wrongdoing. Negotiation will not succeed 
without a necessary basis of trust or a serious value integrative solution. As a last resort, one may 
have to exit from the situation by asking for reassignment or resigning. 

3. Solutions can be generated by readjusting different components of the STS. 

• Technical Puzzle. If the problem is framed as a technical puzzle, then solutions would revolve around 
developing designs that optimize both ethical and technical specifications, that is, resolve the technical 
issues and realize ethical value. In this instance, the problem-solver must concentrate on the hardware 
and software components of the STS. 

• Social Problem. If the problem is framed as a social problem, then solutions would revolve around 
changing laws or bringing about systemic reform through political action. This would lead one to focus 
on the people/groups/roles component (working to social practices) or the legal component. 

• Stakeholder Conflict. If the problem is framed as a conflict between different stakeholder interests, 
then the solution would concentrate on getting stakeholders (both individuals and groups) to agree on 
integrative or interest compromising solutions. This requires concentrating on the people/group/role 
component of the STS. (Note: A stakeholder is any group or individual with a vital interest at play in 
the situation.) 

• Management Problem. Finally, if the problem is framed as a management problem, then the 
solution would revolve around changing an organization's procedures. Along these lines, it would 
address the (1) fundamental goals, (2) decision recognition procedures, (3) organizational roles, or (4) 
decision-making hierarchy of the organization. These are the four components of the CID (corporate 
internal decision) structure described in the "Ethical Reflections" section of the Toysmart case. 

• Nota Bene: Financial issues are covered by the feasibility test in the solution implementation stage. 
As such, they pose side issues or constraints that do not enter into the solution generation phase but 
the solution implementation phase. 

4. Brainstorming. Moral creativity, which involves designing non-obvious solutions, forms an 
essential part of solution generation. Here are some guidelines to get you started. 

• Individually make out a list of solutions before the group meeting. Work quickly to realize a pre- 
established quota of five to ten solutions. After composing a quick first draft, revise the list for clarity 
only; make no substantial changes. 



154 



CHAPTER 5. BUSINESS ETHICS CASE STUDIES 



• Start the group brainstorming process by having the group review and assemble all the individual 
solutions. Do this quickly and without criticism. Beginning criticism at this stage will kill the creativity 
necessary for brainstorming and shut down the more timid (but creative) members of the group. 

• Review the list and identify solutions that are identical or overlap. Begin the refining process by 
combining these solutions. 

• Having reviewed all the brainstormed solutions, it is now time to bring in criticism. Begin by eliminating 
solutions with major ethical problems such as those that violate rights, produce injustices, or cause 
extensive harm. 

• Identify but do not eliminate solutions that are ethical but raise serious practical problems. Do not 
initially eliminate an ethical solution because there are obstacles standing in the way of its imple- 
mentation. Be descriptive. Identify and impartially describe the obstacles. Later, in the solution 
implementation stage, you may be able to design creative responses to these obstacles. 

• Identify solutions that do not "fit" your problem statement. These require a decision. You can throw 
out the solution because it does not solve the problem or you can change the problem. If a solution 
does not fit the problem but, intuitively, seems good, this is a sign that you need to take another look 
at your problem statement. 

• Don't automatically reject partial solutions. For example, sending memos through email rather than 
printing them out and wasting paper may not solve the entire recycling problem for your company. 
But it represents a good, partial solution that can be combined with other partial solutions to address 
the bigger problem. 

• Through these different measures, you will gradually integrate criticism into your brainstorming pro- 
cess. This will facilitate working toward a manageable, refined list of solutions for testing in the next 
stage. 

Exercise 3: Develop a Solution List 

• Have each member of your team prepare a solution list and bring it to the next group meeting. Set a 
quota for this individual list, say, 5 to 10 solutions. 

• Prepare a group list out of the lists of the individual members. Work to combine similar solutions. Be 
sure to set aside criticism until the preliminary group list is complete. 

• Make use of the following table. 

• Refine the group list into a manageable number of solutions for testing in the next stage. Combine 
overlapping solutions. Eliminate solutions that do not respond to the requirements and the problem 
statement that you prepared in the previous exercise. Eliminate solutions that violate important ethical 
considerations, i.e., solutions that violate rights, produce harms, etc. 

• Check your refined solution list with your problem statement. If they do not match, eliminate the 
solution or redefine the problem 

Refined Brainstorm List 



Solution Ranking 


Description of Solution 


Justification (fits requirements, fits problem) 


Best Solution 






Second Best Solution 






Third Best Solution 






Fourth Best Solution 






Fifth Best Solution 







Table 5.4 



Anthony Weston provides an illuminating and useful discussion of creative problem solving in 
the reference provided below. 



155 

5.1.9 Exercise Three: Solution Testing 

In this section, you will test the solutions on the refined list your group produced in the previous exercise. 
Three ethics tests, described below, will help you to integrate ethical considerations in the problem-solving 
process. A global feasibility test will help to identify solutions with serious practical problems. Finally, a 
Solution Evaluation Matrix summarizes the results for class debriefings. 

Setting up for the test. 

• Identify the agent perspective from which the decision will be made 

• Describe the action as concisely and clearly as possible. 

• Identify the stakeholders surrounding the decision, i.e., those who will suffer strong impacts (positively 
or negatively) from the implementation of your decision. Stakeholders have a vital or essential interest 
(right, good, money, etc) in play with this decision. 

• In the harm/beneficence test, identify the likely results of the action and sort these into harms and 
benefits. 

• For the reversibility test, identify the stakeholders with whom you will reverse positions. 

• For the public identification test, identify the values, virtues, or vices your action embodies. Associate 
these with the character of the agent. 

Harm/Beneficence Test 

1. What are the harms your solution is likely to produce? What are its benefits? Does this 
solution produce the least harms and the most benefits when compared to the available 
alternatives? 

2. Pitfall — Too much. In this "Paralysis of Analysis" one factor in too many consequences. To avoid 
the fallacy restrict the analysis to the most likely consequences with the greatest magnitude (Magnitude 
indicates the range and severity of impact). 

3. Pitfall — Too Little. A biased or incomplete analysis results when significant impacts are overlooked. 
Take time to uncover all the significant impacts, both in terms of likelihood and in terms of magnitude. 

4. Pitfall — Distribution of Impacts. Consider, not only the overall balance of harms and benefits 
but also how harms and benefits are distributed among the stakeholders. If they are equally or fairly 
distributed, then this counts in the solution's favor. If they are unequally or unfairly distributed, 
then this counts against the solution. Be ready to redesign the solution to distribute better (=more 
equitably or fairly) the harmful and beneficial results. 

Reversibility Test 

1. Would this solution alternative be acceptable to those who stand to be most affected by 
it? To answer this question, change places with those who are targeted by the action and 
ask if from this new perspective whether the action is still acceptable? 

2. Pitfall — Too much. When reversing with Hitler, a moral action appears immoral and an immoral 
action appears moral. The problem here is that the agent who projects into the immoral standpoint 
loses his or her moral bearings. The reversibility test requires viewing the action from the standpoint 
of its different targets. But understanding the action from different stakeholder views does not require 
that one abandon himself or herself to these views. 

3. Pitfall — Too little. In this pitfall, moral imagination falls short, and the agent fails to view the 
action from another stakeholder standpoint. The key in the reversibility test is to find the middle 
ground between too much immersion in the viewpoint of another and too little. 

4. Pitfall — Reducing Reversibility to Harm/Beneficence. The reversibility test requires that one 
assess the impacts of the action under consideration on others. But it is more than a simple listing of 
the consequences of the action. These are viewed from the standpoint of different stakeholders. The 
reversibility test also goes beyond considering impacts to considering whether the action treats different 
stakeholders respectfully. This especially holds when the agent disagrees with a stakeholder. In these 
disagreements, it is important to work out what it means to disagree with another respectfully. 



156 CHAPTER 5. BUSINESS ETHICS CASE STUDIES 

5. Pitfall — Incomplete survey of stakeholders. Leaving out significant stakeholder perspectives 
skews the results of the reversibility test. Building an excellent death chamber works when one considers 
the action from the standpoint of Hitler; after all, it's what he wants. But treating an individual with 
respect does not require capitulating to his or her desires, especially when these are immoral. And 
considering the action from the standpoint of other stakeholders (say the possible victims of newer, 
more efficient gas chambers) brings out new and radically different information. 

6. Pitfall — Not Weighing and Balancing Stakeholder Positions. This pitfall is continuous with the 
previous one. Different stakeholders have different interests and view events from unique perspectives. 
The reversibility test requires reviewing these interests and perspectives, weighing them against one 
another, and balancing out their differences and conflicts in an overall, global assessment. 

Publicity (or Public Identification) Test 

1. Would you want to be publicly associated or identified with this action? In other words, 
assume that you will be judged as a person by others in terms of the moral values 
expressed in the action under consideration. Does this accord with how you would want 
to or aspire to be judged? 

2. Pitfall — Failure to association action with character of agent. In the publicity test, the 
spotlight of analysis moves from the action to the agent. Successfully carrying out this test requires 
identifying the agent, describing the action, and associating the agent with the action. The moral 
qualities exhibited in the action are seen as expressing the moral character of the agent. The publicity 
test, thus, rests on the idea that an agent's responsible actions arise from and express his or her 
character. 

3. Pitfall — Failure to appreciate the moral color of the action. The publicity test assumes that 
actions are colored by the ends or goods they pursue. This means that actions are morally colored. They 
can express responsibility or irresponsibility, courage or cowardice, reasonableness or unreasonableness, 
honesty or dishonesty, integrity or corrpution, loyalty or betrayal, and so forth. An analysis can go 
astray by failing to bring out the moral quality (or qualities) that an action expresses. 

4. Pitfall — Reducing Publicity to Harm/Beneficence Test. Instead of asking what the action says 
about the agent, many reduce this test to considering the consequences of publicizing the action. So 
one might argue that an action is wrong because it damages the reputation of the agent or some other 
stakeholder. But this doesn't go deep enough. The publicity test requires, not that one calculate the 
consequences of wide-spread knowledge of the action under consideration, but that one draws from the 
action the information it reveals about the character of the agent. The consequences of bad publicity 
are covered by the harm/beneficence test and do not need to be repeated in the public identification 
test. The publicity test provides new information by turning from the action to the agent. It focuses 
on what the action (its moral qualities and the goods it seeks) says about the agent. 

Comparing the Test Results: Meta- Tests 

1. The ethics tests will not always converge on the same solution because each test (and the ethical 
theories it encapsulates) covers a different dimension of the action: (1) harm/beneficence looks at the 
outcomes or consequences of the action, (2) reversibility focuses on the formal characteristics of the 
action, and (3) publicity zeros in on the moral character of the agent. 

2. The meta-tests turn this surface disagreement into an advantage. The convergence or divergence 
between the ethics tests become indicators of solution strength and weakness. 

3. Convergence. When the ethics tests converge on a given solution, this indicates solution strength 
and robustness. 

4. Divergence. When tests diverge on a solution — a solution does well under one test but poorly under 
another — this signifies that it needs further development and revision. Test divergence is not a sign 
that one test is relevant while the others are not. Divergence indicates solution weakness and is a call 
to modify the solution to make it stronger. 



157 

Exercise 3: Summarize your results in a Solution Evaluation Matrix 

1. Place test results in the appropriate cell. 

2. Add a verbal explanation to the SEM table. 

3. Conclude with a global feasibility test that asks, simply, whether or not there exist significant obstacles 
to the implementation of the solution in the real world. 

4. Finish by looking at how the tests converge on a given solution. Convergence indicates solution strength; 
divergence signals solution weakness. 

Solution Evaluation Matrix 



Solution/Test 


Harm/Beneficence 


Reversibility 


Publicity (public identification) 


Feasibility 


First Solution 










Second Solution 










Third Solution 










Fourth Solution 










Fifth Solution 











Table 5.5 



The ethics tests are discussed in Cruz and Davis. See references below, 
also discuss value based approaches in the two references below. 



Wike and Brincat 



5.1.10 Exercise Four: Solution Implementation 

In this section, you will trouble-shoot the solution implementation process by uncovering and defusing 
potential obstacles. These can be identified by looking at the constraints that border the action. Although 
constraints specify limits to what can be realized in a given situation, they are more flexible than generally 
thought. Promptly identifying these constraints allows for proactive planning that can push back obstacles 
to solution implementation and allow for realization of at least some of the value embodied in the solution. 
A Feasibility Test focuses on these situational constraints and poses useful questions early on in the 
implementation process. What conditions could arise that would hinder the implementation of a solution? 
Should the solution be modified to ease implementation under these constraints? Can the constraints be 
removed or modified through activities such as negotiation, compromise, or education? Can solution imple- 
mentation be facilitated by modifying both the solution and the constraints? 

Feasibility Constraints 



Category 


Sub-Category 








Resource 


Money/Cost 


Time/Deadlines 


Materials 


continued on next page 



158 



CHAPTER 5. BUSINESS ETHICS CASE STUDIES 



Interest 



Organizational(Superviso")Legal (laws, regula- 
tions) 



Political/Social 



Technical 



Technology does not ex- 
ist 



Technology patented 



Technology needs modi- 
fication 



Table 5.6 



Resource Constraints: 



• Does the situation pose limits on resources that could limit the realization of the solution 
under consideration? 

• Time. Is there a deadline within which the solution has to be enacted? Is this deadline fixed or 
negotiable? 

• Financial. Are there cost constraints on implementing the ethical solution? Can these be extended 
by raising more funds? Can they be extended by cutting existing costs? Can agents negotiate for more 
money for implementation? 

• Resource. Are necessary resources available? Is it necessary to plan ahead to identify and procure 
resources? If key resources are not available, is it possible to substitute other, more available resources? 
Would any significant moral or non-moral value be lost in this substitution? 

Interest Constraints 

• Does the solution threaten stakeholder interests? Could it be perceived as so threatening 
to a stakeholder's interests that the stakeholder would oppose its implementation? 

• Individual Interests. Does the solution threaten the interests of supervisors? Would they take 
measures to block its realization? For example, a supervisor might perceive the solution as undermining 
his or her authority. Or, conflicting sub-group interests could generate opposition to the implementation 
of the solution even though it would promote broader organizational objectives. 

• Organizational Interests. Does the solution go against an organization's SOPs (standard operating 
procedures), formal objectives, or informal objectives? Could acting on this solution disrupt organi- 
zation power structures? (Perhaps it is necessary to enlist the support of an individual higher up in 
the organizational hierarchy in order to realize a solution that threatens a supervisor or a powerful 
sub-group.) 

• Legal Interests. Are there laws, statutes, regulations, or common law traditions that oppose the 
implementation of the solution? Is it necessary to write an impact statement, develop a legal compliance 
plan, or receive regulatory approval in order to implement the solution? 

• Political/Social/Historical Constraints. Would the solution threaten or appear to threaten the 
status of a political party? Could it generate social opposition by threatening or appearing to threaten 
the interests of a public action group such as an environmental group? Are there historical traditions 
that conflict with the values embedded in the solution? 



Technical Constraints 

• Technology does not yet exist. 

technological ground? 

• Technology Protected by Patent. 

a patent held by a competitor. 

• Technology Requires Modification. The technology required to implement solution exists but 
needs to be modified to fit the context of the solution. Important considerations to factor in would be 
the extent of the modification, its cost, and how long it would take to bring about the modification. 



Would the implementation of the solution require breaking new 
The technology exists but is inaccessible because it is still under 



159 

5.1.11 Ethical Perspective: Free Speech 

By this time, you have already worked through the various rights relevant to business and computing. The 
rights justification framework we have been using is based on the following: 

1. A right is a capacity of action essential to autonomy that others are obliged to recognize and 
respect. 

2. A duty is a principle that obliges us to recognize and respect the legitimate rights claims of others. 

3. Rights and duties are correlative. For every right there is a series of correlative duties and 
duty-holders. 

4. For a right claim to be legitimate, the right must be essential to autonomy, vulnerable to a stan- 
dard threat, and imply correlative duties that do not deprive the duty-holders of anything essential 
(feasible) . 

5. Correlative duties generally fall into three categories. First, are the most fundamental duties not to 
deprive right holders of their right. Second are the duties to prevent others from depriving right- 
holders of their rights whenever possible. Finally, in cases where right-holders have been deprived of 
their right, there are correlative duties to aid those deprived. 

The main claim of freedom of speech consists of the right to express our opinions, even if-and especially 
when-these are offensive to others. Is this a legitimate or valid claim? If so, it must be essential, vulnerable, 
and feasible. Why would freedom of speech be essential to autonomy? (Would you agree that expressing 
one's ideas and receiving feedback from others is a necessary part of developing these thoughts? Then how 
would developing thoughts contribute to autonomy?) Is the standard threat that our thoughts may be 
offensive to others who would then try to censor them? Does this constitute vulnerability and the need to 
protect speech as the capacity to express and develop thought? Finally, does recognizing and respecting free 
speech in others deprive us of something essential? (Is the legal punishment for defamation a violation of 
the right of free speech? Does recognizing and respecting the right of free speech of others deprive us of the 
ability to defend ourselves against defamation?) 

John Stuart Mill limits freedom of speech by his "harm principle." If the speech threatens to harm 
someone (the speaker not included) then society can suppress or censor that speech in its own defense. This 
is a broad statement of the right. For example, free speech need not be responsible speech. It need not even 
be true speech for Mill (see below) discusses the bad consequences of censoring false speech. In fact only 
speech that directly causes harm falls under this principle: yelling "fire" in a crowded theater, inciting an 
angry mob to riot, and motivating others to inflict harm. So Mill pushes back the limits to free speech but 
not entirely. Even for its most eloquent advocate, free speech has its limits. 

Still free speech is allocated generous territory by Mill. He bases his argument against censorship on 
the content of opinions. He shows how censorship is founded on the untenable position of infallibility. If 
one censors opinion contrary to received opinion, then one insulates received opinion from every avenue of 
criticism and improvement-this assumes infallibility. (Received opinion is that which everybody takes for 
true without question or examination. Slavery was received opinion in the southern states of the U.S. in 
the 18th and 19th centuries.) Moreover, this assumes, without proof, the veracity of what society currently 
accepts as truth. Mills' argument for free speech and against censorship looks at three possibilities: 

1. The content of the speech to be censored is true. In this case, censorship is wrong because it 
denies society of the benefit of the truth. This is the most obvious case of the wrongness of censorship. 

2. The content of the speech turns out to be (only) partially true. In this case, censorship is 
still wrong because it suppresses part of the truth and, thus, deprives society of its benefits. 

3. The content of the speech is entirely false. This is the test case. If censorship is wrong even 
when the view suppressed is entirely false, then this is telling. For Mill, censorship is wrong even if 
the suppressed speech turns out to be entirely false, because suppressing the false deprives the truth 
of clarity, which is achieved by contrast with the false, and vigor, which is purchased by defending the 
true against the challenges brought to it by the false. 



160 CHAPTER 5. BUSINESS ETHICS CASE STUDIES 

There is another argument for censorship based, this time, on the speaker. Corporations are considered legal 
persons and have been endowed with legal rights including free speech. Until 1978 this included commercial 
free speech rights but not political free speech rights; corporations could advertise their products (within 
regulated parameters of truth) but they could not advocate a political candidate. But First National 
Bank of Boston v Belotti changed all that. To deny corporations, as legal persons, the right to political 
speech is to target the speaker, not the speech. This opens the way for the suppression of speech based on 
gender, race, political persuasion, or religion because with each of these we have turned from the speech 
itself to the characteristics of the speaker. So the Supreme Court of the United States, using this argument, 
extended corporate free speech rights to include political speech. 

The minority opinion issued by the Supreme Court in this case also found a dangerous precedent. Corpo- 
rate speech backed by the huge financial resources of these commercial entities can easily silence the speech 
of human individuals by drowning it out. Corporations have the money to buy access to the mass media to 
disseminate their speech. Human individuals cannot do this so easily. 

But consider speech in cyberspace. Outside cyberspace, audiences are best reached through the expensive 
mass media giving the advantage to the corporation with its huge financial resources. In cyberspace, the 
networking capacities of the Internet put the speaker in direct contact with the audience and, thus, circum- 
scribes the need for purchasing access to audiences through the expensive mass media. The importance of 
the speaker diminishes and the spotlight focuses, again, on the content of the speech. Notice how in Bioma- 
trix, three individuals were able to blanket the Internet with defamatory speech against Biomatrix. With 
this new found equality in cyberspace, how can corporate organizations like Biomatrix protect themselves 
against cyberslanders? One possibility: hold online service provides or OSPs responsible for the defamatory 
content published within their portals. This issue is addressed in the next ethics perspective piece. 

5.1.12 Ethical Perspective: OSP Responsibility 

Legal Responsibility: Criminal 

Legal responsibility is a highly structured practice. There are two basic kinds, criminal and civil. Criminal 
responsibility requires establishing three things: 

1. That the agent under investigation had a mens rea, a guilty state of mind or an intention to do wrong. 
Suppose, for example, that the BXM Police intended to defame Biomatrix and its top officials in order 
to drive down the value of its stock and to make money by short selling it. Or suppose that the two 
former Biomatrix employees decided to get even with their former employers. This state of mind or 
intention would be termed a mens rea. 

2. That the agent under investigation actually committed the actus reus, the wrongful action. Again, 
the BXM police posted thousands of messages in Yahoo that were false and defamatory. This action 
constitutes the actus reus. 

3. That the mens rea shaped and guided the actus reus. The messages of the BXM Police must be 
defamatory and they must be so intentionally. In other words, the BXM Police cannot be punished if 
they unintentionally published defamatory messages even if they had formed an intention to get back at 
Biomatrix. Their guilty mind must have informed the guilt act, guiding it and shaping it in its planning 
and execution. Thus, the criminal responsibility framework presupposes this connection between mens 
rea and actus reus in order to justify punishment. We can't punish an individual for having a guilty 
intention; he or she must act on it. And we can't punish those who do wrong accidentally, although 
we may be able to establish negligence under civil law (tort). The intention to do wrong must issue 
forth into an actual wrongful action in order for punishment to kick in. 

Legal Responsibility: Civil 

• Responsibility under civil law requires establishing fault such as negligence, carelessness, or recklessness. 
(The later two faults when egregious actually provide an opportunity for criminal responsibility to spill 
into civil responsibility. If a negligence expands into recklessness, then it seems to be in society's 



161 

interest to punish and deter it.) Yahoo may not have intended to harm Biomatrix and its top officials 
but they may not have taken reasonable precautions from preventing others from using their bulletin 
board to cause this harm. If the harm (tort) occurs because of some fault on the part of Yahoo, then 
those who suffer this harm have the right to receive compensation to make them whole, i.e., to restore 
them to the condition they were in prior to the harm. 

• Analogically extending defamation law as it applies offline requires considering three possible ways 
that Yahoo may have been negligent. The law needs to settle on which role to ascribe to the OSP: 
publisher, distributor, and common carrier, their responsibility for displaying defamatory content 
depends on which role the law settles in on. In all three cases, responsibility follows from power and 
control; we are responsible for those things that fall within the scope of our power and control. 

• (1) If OSPs are considered publishers, then they are responsible for the defamatory material that 
appears within their various forums. This is because publishers exercise editorial control over what 
they publish. The nature of the speech, its content, is within the scope of their power and control. 
They are, therefore, responsible. OSPs will dispute this. For example, the Italian court recently found 
Google executives guilty in abstentia for a video displayed in YouTube that showed a child with Down 
syndrome being abused by his classmates. The parents successfully sued Google for violating privacy by 
allowing the publishing of the video. Google removed it immediately upon notification. But they have 
been admonished by the court for allowing the video to be published in the first place. Google claims 
that that they do not exercise editorial control over what can be published and are only responsible 
for timely removal of objectionable content. 

• (2) If OSPs are considered distributors, then they are responsible only for removing objectionable 
content promptly on notification. They do not exercise editorial control over the content distributed 
through their portals. Therefore, they musWhat is within the power of the OSP is to remove content 
quickly upon notification by users. 

• (3) OSPs can also be treated as common carriers like telephone companies. In this case, they would be 
responsible for filtering objectionable content as it makes its way into their forums. To a certain extent, 
this technology exists since filtering programs are used to detect and eliminate spam. (The author also 
found in Yahoo user-activated filters that would remove offensive language.) But filters bring their own 
problems as Lawrence Lessig points out in Code. They can never be calibrated sensitively enough 
to prevent them from filtering out legitimate content. Again, in reference to the Italy trial, Google 
executives argued that holding them responsible as common carriers imposes on them the impossible 
task of reviewing all content before it is published. They also argue that this would have a chilling 
effect on the creativity and innovation engendered on the Internet. 

• The law in the U.S. has generally settled on treating OSPs as distributors. So assume that Yahoo 
is responsible as a distributor in the Biomatrix case, (a) Are they responsible for the defamatory 
content displayed in the financial bulletin board? (b) If so, are they required to compensate Biomatrix 
for the decline in Biomatrix stock that occurred during the time these messages appeared? (c) Did 
Biomatrix notify Yahoo promptly of the presence of defamatory material? Or, was it that Biomatrix 
did not quickly discover the defamatory messages? (d) Was it Yahoo's non- responsiveness, i.e., that 
they failed to remove the defamatory messages promptly after notification that led to the harm? (e) 
Given the long period over which Biomatrix stock declined, can it be proven that the defamatory 
messages were the cause? Even assuming Yahoo responsibility as distributor here, there are still many 
factual issues that must be settled before proving that Yahoo owes damages to Biomatrix. 

Moral Responsibility 

• Moral responsibility is a more nuanced concept. While legal responsibility concentrates on estab- 
lishing minimum standards of acceptable conduct, moral responsibility can move from the minimum 
all the way to the exemplary. While legal responsibility looks to where individuals can be punished 
for untoward actions, moral responsibility considers societal responses that range from social ostracism 
to recognition and praise for conduct that is outstanding. Roughly speaking, moral responsibility is a 
much more flexible and wide ranging concept and practice. 



162 CHAPTER 5. BUSINESS ETHICS CASE STUDIES 

• Moral responsibility begins with causality; some thing (an agent, thing, or event) cause some other 
thing to occur. Causal responsibility is essential for establishing criminal responsibility; one cannot 
blame an punish an individual for something that that individual did not cause. It is also important 
for establishing moral responsibility ranging all the way from blame to praise. 

• Vicarious responsibility departs somewhat from causal responsibility. A parent might be responsible 
for paying for the window broken by his or her child. In other forms of vicarious responsibility, one 
person (a principle) authorizes another (a designated agent) to act on his or her behalf. A private 
individual may hire an engineer to design and supervise the building of a house. The private individual 
is the principle who originates the act; it expresses his or her interest or intention. The agent is 
responsible for the execution of the action originated by the principle; he or she executes the designs of 
the principle. A special problem can arise here. How can the principle ensure that the agent remains 
faithful to his or her interests? Often agents are deviated by conflicting interests, that is, interests that 
come in from the outside and adversely effect the ability of the agent to skillfully and professionally 
carry out the interests of the principle. 

• Capacity responsibility sets forth the conditions under which an action can be imputed or attributed 
to an agent for the purpose assigning moral praise and blame. The ethicists, F.H. Bradley, argues that 
there are three: selfsameness, moral sense, and ownership. More on these below. 

• Causal and capacity responsibility are focused on the past. Role Responsibility looks to the future 
and outlines those actions or tasks one is obliged to perform as a part of his or her social, occupational, 
or professional role. Parents are (role) responsible for looking after their childrens' health. Engineer's 
are (role) responsible for holding paramount the health, safety, and welfare of the public. Individuals 
are answerable when they fail to carry out their role responsibilities. 

• Finally, there is what Goodpaster and Velazquez describe as the aretaic sense of responsibility 
or responsibility as a virtue or excellence. (Arete in Greek signifies excellence.) Calling an individual 
responsible in this sense is to call him or her trustworthy or reliable in an exemplary sense. This applies 
to those who carry out their responsibilities in an exemplary manner (an outstanding parent) and go 
beyond the moral minimum in doing so. 

Capacity Responsibility: Conditions of Imputability 

• Self-Sameness: We cannot punish one individual for the action of another. (Does this mean we 
cannot punish Yahoo for messages displayed by the BXM Police?) In more formal terms, we cannot 
punish one individual for the actions committed by another. We can punish one person only if he or 
she is the "selfsame" person as the one who committed the untoward (wrongful) action in the past. 
This condition says that you have to have the right person, the one who, in fact, did the wrongful 
action in question. In the Biomatrix case, the John Doe lawsuit serves to establish selfsameness in this 
case by identifying the real identities of the authors of the defamatory messages. 

• Moral Sense: In general, to be responsible is to be able to appreciate the moral qualities of one's acts 
and to shape one's responses in accordance with this appreciation. Children do not have this capacity 
yet. Those (besides children) who lack this capacity are generally termed insane. (Herbert Fingarette 
discusses this in some detail in his book Criminal Insanity.) It is pretty clear that Costanzo, 
Costanzo, and Morris had moral sense, that is, that they had the ability to appreciate that their 
messages were defamatory and that they were wrong. Their claim that such their actions were excusable 
because they were online is difficult to accept. But does operating anonymously online undermine moral 
sense? Do different conventions (like flaming) cause us to suspend normal expectations regarding 
defamation? Huff, Johnson, and Miller have interesting things to say about this in their essay on 
Virtual Harm. 

• Ownership: This condition is situation specific as opposed to moral sense which is more general. 
Individuals are responsible only for those actions performed knowingly and voluntarily. Put negatively, 
we are not responsible for actions performed under ignorance or compulsion. You betray your friend's 
secret without knowing that it was a secret. Does this mean you are not responsible? You said some 
terrible things about your friend but you were drunk at the time. How could you help it? But weren't 



163 

you responsible for getting yourself into this state in the first place? The BXM Police knew what they 
were doing. Specifically, they knew that the information they were spreading about Biomatrix was 
false. And, nobody was holding a gun to their heads forcing them to send their messages. Their actions, 
then, were performed without ignorance and compulsion. This absence of ignorance and compulsion 
establishes capacity in terms of ownership. 

5.1.13 What did you learn? 

This section provides closure to the module for students. It may consist of a formal conclusion that sum- 
marizes the module and outlines its learning objectives. It could provide questions to help students debrief 
and reflect on what they have learned. Assessment forms (e.g., the "Muddiest Point" Form) could be used 
to evaluate the quality of the learning experience. In short, this section specifies the strategy for bringing 
the module to a close. 

In this module, you have. . . 

• studied a real world case that raised serious problems with intellectual property, privacy, security, and 
free speech. Working with these problems has helped you to develop a better "working" understanding 
of these key concepts, 

• studied and practiced using four decision-making frameworks: (1) using socio-technical analysis to 
specify the problem in a complex, real world case, (2) practiced brainstorming techniques to develop 
and refine solutions that respond to your problem, (3) employed three ethics tests to integrate ethical 
considerations into your solutions and to test these solutions in terms of their ethics, and (4) applied 
a feasibility analysis to your solutions to identify and trouble-shoot obstacles to the implementation of 
your ethical solution, 

• explored the analogy between solving ethical and design problems, 

• practiced the skills of moral imagination, moral creativity, reasonableness, and perseverance, and. . . 

• experienced, through key participant perspectives, the challenges of ethics advocacy "under the gun." 

Debrief on your group work before the rest of the class 

1. Provide a concise statement and justification of the problem your group specified 

2. Present the refined solution generation list your group developed in exercise 2. 

3. Present and provide a quick summary explanation of the results of your group's solution evaluation 
matrix. 

4. Show your group's feasibility matrix and summarize your assessment of the feasibility of implementing 
the solution alternatives you tested in exercise three. 

Group Debriefing 

1. Were there any problem you group had working together to carry out this case analysis? What were 
the problems and how did you go about solving them? 

2. What problems did you have with understanding and practicing the four frameworks for solving prob- 
lems? How did you go about solving these problems? Does your group have any outstanding questions 
or doubts? 

3. Now that you have heard the other groups present their results, what differences emerged between 
your group's analysis and those of the other groups? Have you modified your analysis in light of the 
analyses of the other groups? If so how? Do the other groups need to take into account any aspects of 
your group's debriefing? 

5.1.14 Biomatrix Presentation 

[Media Object] 2 



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164 CHAPTER 5. BUSINESS ETHICS CASE STUDIES 

[Media Object] 3 

5.1.15 Appendix 

This optional section contains additional or supplementary information related to this module. It could 
include: assessment, background such as supporting ethical theories and frameworks, technical information, 
discipline specific information, and references or links. 

References on Biomatrix 

1. Biomatrix Draft SEC Report (for fiscal year ending on Dec 31, 1999). Accessed on 
April 2, 2001. http://www.sec.gov/Archives/edgar/data/747952/000091205700046056/0000912057- 
00-046056.txt. Report addresses risk facts with Biomatrix including protecting intellectual property 
and dealing with government regulations. Outlines financial weak spots with Biomatrix including 
patent protection and conforming to government regulations. 

2. Buss, D. "Tender Joints." In Wall Street Journal November 6, 2000. Presents pros and cons of visco 
supplementaiton using Biomatrix product, Synvisc. 

3. Guernsey, L. "Yahoo to Try Harder to Rid Postings of Hateful Material" In The New York Times 
January 3, 2001. Outlines Yahoo response to Biomatrix and other incidents of cyberslander. 

4. Hines, J.I. and Cramer, M.H. (May-June 2003). "Protecting Your Organization's Reputation Against 
Cybersmear." In Legal Report: 1-8. Provides suggestions on how to respond to cyberslander. 

5. Dean, J.W. (August 2003). "Defamation Immunity On The Internet." In Modern Practice. Accessed 
online http://practice.findlaw.com/feature-0803-html on7/5/04. Dean explains analogy of online ser- 
vice provider responsibility with publishers, distributors, and common carriers. 

6. Pizzi, P.J. and Barnes, J.L. ((2001). " How to Respond to Cybersmear" Connell Foley, LLP. Accessed 
on 9/28/10 at http://www.connellfoley.com/seminar/employsmear.html. 

7. Margaret Mannix, Toni Locy, Kim Clark, Anne Kates Smith, Joellen Perry, Frank McCoy, Joannie 
Fischer, Jeff Glasser and David E. Kaplan. "The Web's Dark Side: In the shadows of cyberspace, an 
ordinary week is a frightening time." In U.S. New and World Report. 8/20/00. Accessed online 
http://www.usnews.com/usnews/biztech/articles/000828/archive_013282_4.htm on 9/28/10. 

References 

1. Bradley, F.H. (1927/1963). Ethical Studies: Essay I. Oxford, UK: Oxford University Press, 3-4. 

2. Brincat, Cynthia A. and Wike, Victoria S. (2000) Morality and the Professional Life: Values at Work. 
Upper Saddle River, NJ: Prentice Hall. 

3. Cruz, J. A., Frey, W. J. (2003) An Effective Strategy for Integration Ethics Across the Curriculum in 
Engineering: An ABET 2000 Challenge, Science and Engineering Ethics, 9(4): 543-568. 

4. Davis, M., Ethics and the University, Routledge, London and New York, 1999: 166-167. 

5. Richard T. De George, "Ethical Responsibilities of Engineers in Large Organizations: The Pinto Case," 
in Ethical Issues in Engineering, ed. Deborah G. Johnson (1991) New Jersey: Prentice-Hall: 175-186. 

6. Charles Harris, Michael Pritchard and Michael Rabins (2005) Engineering Ethics: Concepts and 
Cases, 3rd Ed. Belmont, CA: Thomson/Wadsworth: 203-206. 

7. Huff, Chuck and Jawer, Bruce, "Toward a Design Ethics for Computing Professionals in Social Issues 
in Computing: Putting Computing in its Place, Huff, Chuck and Finholt, Thomas Eds. (1994) 
New York: McGraw-Hill, Inc. 

8. Mill, J.S. (1978). On Liberty: Chapter 1. Indianapolis, IN: Hackett Publishing Company. 

9. Solomon, Robert C. (1999) A Better Way to Think About Business: How Personal Integrity 
Leads to Corporate Success. Oxford, UK: Oxford University Press. 

10. Spinello, R.A. (2001). "Internet Service Providers and Defamation: New Standards of Liability." In 
Readings in Cyberethics. Sudbury, MA: Jones and Bartlett Publishers, 198-209. 



3 This media object is a downloadable file. Please view or download it at 
< BiomatrixResp Vl.pptx> 



165 

11. Tavani, H.T. (2004). Ethics and Technology: Ethical Issues in an Age of Information and 
Communication Technology. Danvers, MA: John Wiley and Sons, 251-255. 

12. Anthony Weston. (2001) A Practical Companion to Ethics, 2nd ed. USA: Oxford University 
Press, 2001, Chapter 3. 

13. Carolyn Whitbeck (1998) Ethics in Engineering Practice and Research. U.K. Cambridge Uni- 
versity Press: 55-72 and 176-181. 

14. Wike, Victoria S. (2001) "Professional Engineering Ethics Bahavior: A Values-based Approach," Pro- 
ceedings of the 2001 American Society for Engineering Education Annual Conference and 
Exposition, Session 2461. 

5.1.16 EAC ToolKit Project 

5.1.16.1 This module is a WORK-IN-PROGRESS; the author(s) may update the content as 
needed. Others are welcome to use this module or create a new derived module. You can 
COLLABORATE to improve this module by providing suggestions and/or feedback on your 
experiences with this module. 

Please see the Creative Commons License 4 regarding permission to reuse this material. 

5.1.16.2 Funded by the National Science Foundation: "Collaborative Development of Ethics 
Across the Curriculum Resources and Sharing of Best Practices," NSF-SES-0551779 

5.2 Gray Matters for the Hughes Aircraft Case 5 

5.2.1 Introduction 

I. Introduction 

The Hughes Aircraft Case involves a group of employees in charge of testing chips for weapons systems. 
Because of the lengthy testing procedure required by the U.S. Defense Department, Hughes soon fell behind 
schedule in delivering chips to customers. To get chips out faster, some Hughes middle level managers 
began to put pressure on employees to pass chips that had failed tests or to pass them without testing. 
The scenarios below consist of narratives that stop at the point of decision. Your job is to complete the 
narrative by making a decision. Alternatives are provided to get the process started, but you may find it 
necessary to design your own solution. Ethics and feasibility tests help you to evaluate these alternatives 
and even design new ones more to your liking. This format superficially resembles the Gray Matters exercise 
used at Boeing Corporation. (More information on the history of Gray Matters can be found by consulting 
Carolyn Whitbeck, Ethics in Engineering Practice, 1998, 176-182.) This version differs in being more open- 
ended and more oriented toward giving you the opportunity to practice using ethical theory (which has been 
encapsulated into ethics tests). 

5.2.2 Directions 

II. Directions 

• Read the following scenarios and the accompanying solutions 

• Evaluate the alternatives in terms of the tests described below. 

• Choose the one you think best or design your own solution if you believe you can do better. 

• Summarize your results by filling in the solution evaluation matrix that appears on the page following 
the scenario. Notice that the first column repeats the solution alternatives. 

4 http://creativecommons.org/licenses/by/2.0/ 

5 This content is available online at <http://cnx.Org/content/ml4036/l.7/>. 



166 CHAPTER 5. BUSINESS ETHICS CASE STUDIES 

• Be prepared to present your matrix to the class. You will also provide the other groups in the class 
with a copy of your matrix for their ethics portfolios 

Scenario One: Responding to Organizational Pressure 

Frank Saia has worked at Hughes Aircraft for a long time. Now he is faced with the most difficult decisions of 
his career. He has been having problems in the environmental testing phase of his microchip manufacturing 
plant; the detailed nature of these tests has caused Hughes to be consistently late in delivering the chips to 
customers. Because of the time pressure to deliver chips, Saia has been working to make the production of 
chips more efficient without losing the quality of the product. Chips are manufactured and then tested, and 
this provides two places where the process can bottle up. Even though you might have a perfectly fine chip 
on the floor of the plant, it cannot be shipped without testing. And, since there are several thousand other 
chips waiting to be tested, it can sit in line for a long time. Saia has devised a method that allows testers to 
put the important chips, the "hot parts," ahead of the others without disrupting the flow and without losing 
the chips in the shuffle. He has also added a "gross leak" test that quickly tells if a chip in a sealed container 
is actually sealed or not. Adding this test early in the testing sequence allows environmental testing to avoid 
wasting time by quickly eliminating chips that would fail a more fine-grained leak test later in the sequence. 
Because environmental testing is still falling behind, Saia's supervisors and Hughes customers are getting 
angry and have begun to apply pressure. Karl Reismueller, the director of the Division of Microelectronics at 
Hughes, has given Saia's telephone number to several customers, whose own production lines were shut down 
awaiting the parts that Saia has had trouble delivering. His customers are now calling him directly to say 
"we're dying out here" for need of parts. Frank Saia has discovered that an employee under his supervision, 
Donald LaRue, has been skipping tests on the computer chips. Since LaRue began this practice, they have 
certainly been more on time in their shipments. Besides, both LaRue and Saia know that many of the "hot" 
parts are actually for systems in the testing phase, rather than for ones that will be put into active use. So 
testing the chips for long-term durability that go into these systems seems unnecessary. Still, LaRue was 
caught by Quality Control skipping a test, and now Saia needs to make a decision. Upper management has 
provided no guidance; they simply told him to "handle it" and to keep the parts on time. He can't let LaRue 
continue skipping tests, or at least he shouldn't let this skipping go unsupervised. LaRue is a good employee, 
but he doesn't have the science background to know which tests would do the least damage if they were 
skipped. He could work with LaRue and help him figure out the best tests to skip so the least harm is done. 
But getting directly involved in skipping the tests would mean violating company policy and federal law. 

Alternatives 

1. Do nothing. LaRue has started skipping tests on his own initiative. If any problems arise, then LaRue 
will have to take responsibility, not Saia, because LaRue was acting independently of and even against 
Saia's orders. 

2. Call LaRue in and tell him to stop skipping tests immediately. Then call the customers and explain 
that the parts cannot be shipped until the tests are carried out. 

3. Consult with LaRue and identify non essential chips or chips that will not be used in systems critical 
to safety. Skipping tests on these chips will do the least damage. 

4. Your solution. . .. 

Scenario Two: Responding to Wrongdoing 

Margaret Gooderal works in a supervisory position in the environmental testing group at Hughes Aircraft. 
Her supervisor, Donald LaRue, is also the current supervisor for environmental testing. The group that 
LaRue and Gooderal together oversee test the chips that Hughes makes in order to determine that they 
would survive under the drastic environmental conditions they will likely face. Rigorous testing of the chips 
is the ideal, but some chips (the hot chips) get in line ahead of others. Gooderal has found out that over 
the last several months, many of these tests are being skipped. The reason: Hughes has fallen behind in the 
production schedule and Hughes upper management and Hughes customers have been applying pressure to 
get chip production and testing back on schedule. Moreover, LaRue and others feel that skipping certain 
tests doesn't matter, since many of these chips are being used in systems that are in the testing phase, rather 
than ones that will be put into active use. A few months after Margaret Gooderal started her new position, 



167 

she was presented with a difficult problem. One of the "girls" (the women and men in Environmental Testing 
at Hughes), Lisa Lightner, came to her desk crying. She was in tears and trembling because Donald LaRue 
had forcefully insisted that she pass a chip that she was sure had failed the test she was running. Lightner 
ran the hermeticity test on the chips. The chips are enclosed in a metal container, and one of the questions 
is whether the seal to that container leaks. From her test, she is sure that the chip is a "leaker" — the seal 
is not airtight so that water and corrosion will seep in over time and damage the chip. She has come to 
Gooderal for advice. Should she do what LaRue wants and pass a chip she knows is a leaker? 

Alternatives 

1. Gooderal should advise Lightner to go along with LaRue. He is her supervisor. If he orders to pass 
the chip, then she should do so. 

2. Gooderal should go to Human Resources with Lightner and file a harassment complaint against LaRue. 
Skipping tests is clearly illegal and ordering an employee to commit an illegal act is harassment. 

3. Gooderal and Lightner should blow the whistle. They should go to the U.S. defense department and 
inform them of the fact that Hughes Aircraft is delivering chips that have either failed tests or have 
not been tested. 

4. Your solution. . .. 

Scenario 3: Goodearl, Ibarra, and the AMRAAM Incident 

Now that Goodearl had few sympathizers among upper management, she increasingly turned to Ruth Ibarra 
in Quality assurance for support in her concerns about test skipping and the falsification of paperwork. One 
day, Goodearl noticed that some AMRAAM chips with leak stickers were left on her project desk in the 
environmental testing area. The leak stickers meant that the seal on the chips' supposedly airtight enclosure 
had failed a test to see if they leaked. AMRAAM meant that the chips were destined to be a part of an 
Advanced Medium Range Air-to-Air Missile. Goodearl knew that these parts could not be retested and 
needed to be simply thrown away. So why was someone keeping them? She also knew that these were 
officially "hot parts" and that the company was behind schedule in shipping these parts. After consulting 
with Ruth Ibarra, the two of them decided to do some sleuthing. They took the chips and their lot travelers 
to a photocopy machine and made copies of the travelers with "failed" noted on the leak test. They then 
replaced the chips and their travelers on the desk. Later that day, as Don LaRue passed the desk, Goodearl 
asked Don LaRue if he knew anything about the chips. "None of your business," he replied. The chips 
disappeared, and later the travelers showed up in company files with the "failed" altered to "passed." So, 
Goodearl and Ibarra had clear evidence (in their photocopy of the "failed" on the traveler) that someone 
was passing off failed chips to their customers. And these were important chips, part of the guidance system 
of an air-to-air missile. 

Alternatives: Since they have clear evidence, Gooderal and Ibarra should blow the whistle. 
Evaluate each of the following ways in which they could blow the whistle 

1. Blow the whistle to Hughes' Board of Directors. In this way they can stop the test skipping but will 
also be able to keep the whole affair "in house." 

2. Blow the whistle to the local news media. In this way they will shame Hughes into compliance with 
the testing requirements. 

3. Take the evidence to the U.S. Department of Defense, since they are the client and are being negatively 
impacted by Hughes' illegal actions. 

4. Some other mode of blowing the whistle. . .. 

Solution Evaluation Matrix 



168 



CHAPTER 5. BUSINESS ETHICS CASE STUDIES 



Alt er nat ives/Test 


sReversibility/Rig 
Test 


iHarm/Benefits 
Test 


Virtue/ Value 
Test (Also Pub- 
licity) 


Global Feasibil- 
ity Test (Imple- 
mentation Ob- 
stacles) 


Alternative One 
(Worst Alterna- 
tive) 


Evaluate Alt 1 
using reversibil- 
ity/rights test 








Alternative Two 
(Best among 
those given) 




Weigh harms 
against benefits 
for alt 2 






Alternative 
Three 






What val- 
ues/dis values 
are realized in alt 
3? 




Your Solution 








What obstacles 
could hinder im- 
plementation of 
solution? 



Table 5.7 



5.2.3 Ethics Tests: Set Up and Pitfalls 

III. Solution Evaluation Tests 

• REVERSIBILITY: Would I think this is a good choice if I were among those affected by it? 

• PUBILICITY: Would I want to be publicly associated with this action through, say, its publication in 
the newspaper? 

• HARM/BENEFICENCE: Does this action do less harm than any of the available alternatives? 

• FEASIBILITY: Can this solution be implemented given time, technical, economic, legal, and political 
constraints? 



Harm Test Set-Up 

• Identify the agent (=the person who will perform the action). Describe the action (=what the agent 
is about to do). 

• Identify the stakeholders (individuals who have a vital interest at risk) and their stakes. 

• Identify, sort out, and weight the expected results or consequences. 

Harm Test Pitfalls 

• Paralysis of Action-considering too many consequences. 

• Incomplete analysis-considering too few results. 

• Failure to weigh harms against benefits. 

• Failure to compare different alternatives. 

• Justice failures-ignoring the fairness of the distribution of harms and benefits. 

Reversibility Test Set-Up 

• Identify the agent 

• Describe the action 



169 

• Identify the stakeholders and their stakes 

• Use the stakeholder analysis to select the relations to be reversed. 

• Reverse roles between the agent (you) and each stakeholder: put them in your place (as the agent) 
and yourself in their place (as the target of the action 

• If you were in their place, would you still find the action acceptable? 

Reversibility Pitfalls 

• Leaving out a key stakeholder relation. 

• Failing to recognize and address conflicts between stakeholders and their conflicting stakes. 

• Confusing treating others with respect with capitulating to their demands (Reversing with Hitler). 

• Failing to reach closure, i.e., an overall global reversal assessment that takes into account all the 
stakeholders the agent has reversed with. 

Public Identification Set-Up 

• Set up the analysis by identifying the agent, describing the action under consideration, and listing the 
key values or virtues at play in the situation. 

• Associate the action with the agent. 

• Identify what the action says about the agent as a person. Does it reveal him or her as someone 
associated with a virtue/value or a vice? 

Public Identification Pitfalls 

1. Action is not associated with the agent. The most common pitfall is failure to associate the agent and 
the action. The action may have bad consequences and it may treat individuals with disrespect but 
these points are not as important in the context of this test as what they imply about the agent as a 
person who deliberately performs such an action. 

2. Failure to specify the moral quality, virtue, or value of the action that is imputed to the agent in the 
test. To say, for example, that willfully harming the public is bad fails to zero in on precisely what 
moral quality this attributes to the agent. Does it render him or her unjust, irresponsible, corrupt, 
dishonest, or unreasonable? 



Gray Matters in Hughes Exercises 



This is an unsupported media type. To view, please see 
http://cnx.org/content/ml4036/latest/GM_Hughes_V2.doc 



Figure 5.2: These exercises present three decision points from Hughes, solution alternatives, summaries 
of ethics and feasibility tests, and a solution evaluation matrix. Carry out the exercise by filling in the 
solution evaluation matrix. 



This timeline is taken from the Computing Cases website developed and maintained by Dr. Charles Huff at 
St. Olaf College. Computing Cases is funded by the National Science Foundation, NSF DUE-9972280 and 
DUE 9980768. 



170 CHAPTER 5. BUSINESS ETHICS CASE STUDIES 

5.2.4 

Time Line 



171 



1979 


Ruth Ibarra beginsworking for Hughes Air- 
craft company's Microelectronic Circuit Division 
(Hughes MCD) in Newport Beach, CA 


1981 


Margaret Gooderal begins working for Hughes 
MCD as a supervisor for assembly on the hybrid 
production floor and as a supervisor in the hybrid 
engineering lab 


1984 


Ibarra becomes supervisor for hybrid quality assur- 
ance 


1985 


Goodearl asks Ibarra to look at errors in paper- 
work, Ibarra brings errors to the attention of her 
supervisors and was told to keep quiet. This begins 
time period where Goodearl/Ibarra become aware 
of problems in hybrid chip testing and paperwork. 


1986 


Goodearl becomes supervisor for seals processing in 
the environmental testing area. 


1986 


Faise Claims Act (31 U.S. C 3729-3733) becomes 
False Claims Reform Act of 1986 making it stronger 
and easier to apply. 


Oct. 1986 


Goodearl/Ibarra report problems ot Hughes man- 
agement, and, after the problems were not fixed, 
Goodearl/Ibarra reported the allegations of faulty 
testing to the United States Department of Defense. 


Jan 9, 1987 


Earliest date that Hughes may have stopped ne- 
glecting environmental screening tests. 


1988 


Ibarra leaves Hughes feeling that her job had been 
stripped of all real responsibility. 


March 1989 


Goodearl is laid off from Hughes. 


1995 


Goodearl and her husband are divorced. 



Table 5.8 



Civil Suit Timeline 



1990-1996 


United States of America, ex rel. Taxpayers 
Against Fraud, Ruth Aldred (was Ibarra), and Mar- 
garet Goodearl v. Hughes Aircraft Company, Inc. 


1990 


Goodearl files wrongful discharge suit against 
Hughes and a number of individual managers, 
which was eventually dropped in favor of the civil 
suit. 


continued on next page 



172 



CHAPTER 5. BUSINESS ETHICS CASE STUDIES 



May 29, 1990 


Thinking the government investigation was tak- 
ing too much time, Goodearl/Aldred file civil suit 
against Hughes under False Claims Reform Act of 
1986 with the help of Taxpayers Against Fraud and 
Washington law firm Phillips and Cohen. 


December 1992 


Under provisions of the FCA, the U.S. Department 
of Justice Civil Division takes over the civil case. 


Sep. 10, 1996 


Hughes found guilty in civil trial. Pays U.S. Gov- 
ernment 4,050,00 dollars and each relator 891,000 
dollars plus a separate payment of 450,000 dollars 
to cover attorney's fees, costs, and expenses. 



Table 5.9 



Criminal Suit Timeline 



1991-1993 


United States of America v. Hughes Aircraft Co., 
and Donald LaRue 


December 13, 1991 


After a lengthy investigation, the U.S. Department 
of Defense charges Hughes and Donald A. LaRue 
with a 51-count indictment accusing it of falsifying 
tests of microelectronic circuits (criminal suit). 


June 15, 1992 


Hughes found guilty of conspiring to defraud the 
U.S. Government in crminal case, co-defendent 
LaRUE acquitted following 4-week trial. Good- 
earl/Aldred called as witnesses in trial. Hughes ap- 
peals. 


Oct. 29, 1992 


Hughes fined 3.5 million in criminal trial decision. 


December 2, 1993 


Appellate court upholds 1992 criminal conviction 
and sentence. Hughes appeals. 



Table 5.10 



173 



Hughes Socio Technical System 





Hardware/Soi 


tw&rpsical 
Surround- 
ings 


People, 

Roles, 

Structures 


Procedures 


Laws and 
Regulations 


Data 
Data 

tures 


and 
Struc- 


Description 


Hybrid 

Chips 
(circuitry 
hermetically 
sealed in 


Battle con- 
ditions 
under which 
chips might 
be used 


Hughes 
Microelec- 
tric Circuit 
Division 


Chip Test- 
ing: Tem- 
perature 
Cycle, Con- 
stant Ac- 


Legally 

Mandated 

Tests 


Lot Trav- 
elors to 
document 
chips 




metal or 






celeration, 










ceramic 






Mechani- 










packages in 
inert gas 
atmosphere 






cal Shock, 
Hermeticity 
(Fine and 
Gross Leak) , 
P.I.N.D. 










Analogue 
to Digital 


E-1000 at 
Hughes 


Department 
of Defense 


Hughes 
Human 


Whistle 
Blower 








Conversion 
Chips 


(Clean 
Room) 


(Office of 

Inspector 

General) 


Resources 
Procedures 
for Com- 
plaints 


Protection 
Legislation 








Radar and 




Hughes 


Dissenting 


Qui Tarn 








Missile 




Quality 


Professional 


Lawsuit, 








Guidance 




Control 


Opinions 


Civil Suit, 








Systems 








Criminal 
Suit 












Individuals: 
















Reismueller, 
















Temple, 
Saia, 
















LaRue, 

Goodearl, 
















Ibarra/ Aldren 


















continued 


on next page 







174 CHAPTER 5. BUSINESS ETHICS CASE STUDIES 



Table 5.11 

5.2.5 Blowing the Whistle 

Ethical Dissent 

1. Establish a clear technical foundation. 

2. Keep your arguments on a high professional plane, as impersonal and objective as possible, avoiding 
extraneous issues and emotional outbursts. 

3. Try to catch problems early, and keep the argument at the lowest managerial level possible. 

4. Before going out on a limb, make sure that the issue is sufficiently important. 

5. Use (and help estabish) organizational dispute resolution mechanisms. 

6. Keep records and collect paper. 

7. These items are taken from the IEEE website, link above. 

Before Going Public 

1. Make sure of your motivation. 

2. Count your costs. 

3. Obtain all the necessary background materials and evidence. 

4. Organize to protect your own interests. 

5. Choose the right avenue for your disclosure. 

6. Make your disclosure in the right spirit. 

7. These items come from the IEEE (see onlineethics link) and from the manuscript of Good Computing 
by Chuck Huff, William Frey, and Jose Cruz. 

Places to Go 

1. Government Agencies 

2. Judicial Systems 

3. Legislators 

4. Advocacy Groups 

5. News Media 

6. In Puerto Rico, laws 14 and 426 have been passed to protect those who would blow the whistle on 
government corruption. The Oficina de Etica Gubernamental de Puerto Rico has a whistle blower's 
hotline. See link above. 

When to Blow the Whistle. 

1. Serious and Considerable Harm 

2. Notification of immediate supervisor. 

3. Exhaustion of internal channels of communication/appeal. 

4. Documented Evidence. 

5. Likelihood of successful resolution. 

References 

1. Richard T. De George, "Ethical Responsibilities of Engineers in Large Organizations: The Pinto Case," 
in Ethical Issues in Engineering, ed. Deborah G. Johnson (1991) New Jersey: Prentice-Hall: 175- 
186. 

2. Carolyn Whitbeck (1998) Ethics in Engineering Practice and Research. U.K. Cambridge University 
Press: 55-72 and 176-181. 

3. Charles Harris, Michael Pritchard and Michael Rabins (2005) Engineering Ethics: Concepts and Cases, 
3rd Ed. Belmont, CA: Thomson/Wadsworth: 203-206. 



175 



5.3 Case Analysis Module: Therac-25 6 



Computer Ethics 

Case Module Template 

By William J. Frey 

Module Introduction: 

The Therac-25 case is what Huff and Frey call a thick, historical, evaluative, big news and bad news case. 
Tackling cases of this complexity requires both careful thought and considerable skill. Especially important 
is the ability to sift through the case details, documents, and conflicting narratives. The purpose of this 
module is to provide students with a structure to tackle big, long, and complicated cases. Students will receive 
frameworks to help them structure the case's ethical and social problems. They will also be provided with 
decision points that will help them to enter into the case and take up the standpoint of a participant. The 
module presented below can be linked to materials that can be found at www.computingcases.org. Nancy 
Leveson, in Safeware: System Safety and Computer (515-553), also provides an excellent and comprehensive 
account. Excellent advice on how to teach the case, updated information, and clear explanations of the 
programming errors are provided by Chuck Huff and Richard Brown in "Integrating Ethics into a Computing 
Curriculum: A Case Study of the Therac-25." The materials posted at Computing Cases were all developed 
through NSF projects DUE-9972280 and DUE 9980768.) 

The module presents the case abstract and timeline. It then refers students to computingcases.org where 
they will find the case narrative, history, and supporting documents that provide background information 
necessary for analysis. The case abstract and timeline introduce students to the basic outlines of the case. 
The accompanying decision point taken from the case provides students with the necessary focus to carry out 
an in-depth analysis. Students respond to the decision-point by working through the four stages: problem 
specification, solution generation, solution testing, and solution implementation. 

Module Activities: 

1. Instructor introduces the case based on the abstract and timeline found at www.computingcases.org 7 

2. Students read case abstract, timeline, case decision point, and case analysis exercises. 

3. Students do further research into the case by consulting ComputingCases materials which include 
narratives, histories, supporting documents, and ethical analyses. 

4. Students carry out the activities outlined in the accompanying case exercises by (a) specifying the 
problem raised in the decision point, (b) generating solutions, (c) testing solutions using ethics tests, and 
(d) developing plans for implementing the solution over situational constraints. 

5. Students prepare their case analyses working in small groups. 

6. These groups present their completed analysis to the class in a case-debriefing session. 

7. The instructor concludes by discussing the problem-solving issues and intermediate moral concepts 
raised by the case. 

5.3.1 Therac-25 Abstract 

Therac-25 8 was a new generation medical linear accelerator 9 for treating cancer. It incorporated the most 
recent computer control equipment. Therac-25's computerization made the laborious process of machine 
setup much easier for operators, and thus allowed them to spend minimal time in setting up the equipment. 
In addition to making setup easier, the computer also monitored the machine for safety. With the advent 
of computer control, hardware based safety mechanisms were transferred to the software. Hospitals were 
told that the Therac-25 medical linear accelerator had "so many safety mechanisms" that it was "virtually 
impossible" to overdose a patient. Normally, when a patient is scheduled to have radiation therapy for cancer, 
he or she is scheduled for several sessions over a few weeks and told to expect some minor skin discomfort 
from the treatment. The discomfort is described as being like a mild sunburn over the treated area. But 



6 This content is available online at <http://cnx.Org/content/ml3765/l.l/>. 



7 



http 
s http 
'http 



// www.computingcases.org/ 

// www.computingcases.org/case_materi als/therac/teaching/therac/supporting_docs/Therac%20Glossary.html#tr25 

// www.computingcases.org/case_materi als/therac/teaching/therac/supporting_docs/Therac%20Glossary.html#trl3 



176 CHAPTER 5. BUSINESS ETHICS CASE STUDIES 

in this case on safety critical software, you will find that some patients received much more radiation than 
prescribed 

Therac -25 Timeline 



177 



Earlyl970's 


AECL and a French Company (CGR) collaborate 
to build Medical Linear Accelerators (linacs). They 
develop Therac-6, and Therac-20. (AECL and 
CGR end their working relationship in 1981.) 


1976 


AECL developes the revolutionary "double pass" 
accelerator which leads to the development of 
Therac-25. 


March, 1983 


AECL performs a safety analysis of Therac-25 
which apparently excludes an analysis of software. 


July 29,1983 


In a PR Newswire the Canadian Consulate General 
announces the introduction of the new "Therac 25" 
Machine manufactured by AECL Medical, a divi- 
sion of Atomic Energy of Canada Limited. 


ca. Dec. 1984 


Marietta Georgia, Kennestone Regional Oncology 
Center implements the new Therac-25 machine. 


June 3, 1985 


Marietta Georgia, Kennestone Regional Oncology 
CenterKatherine (Katy) Yarbrough, a 61-year-old 
woman is overdosed during a follow-up radiation 
treatment after removal of a malignant breast tu- 
mor. Tim Still, Kennestone Physicist calls AECL 
asking if overdose is possible; three days later he is 
informed it is not. 


July 26, 1985 


Hamilton, Ontario, Canada. Frances Hill, a 40- 
year-old patient is overdosed during treatment for 
cervical carcinoma. AECL is informed of the injury 
and sends a service engineer to investigate. 






November 3, 1985 


Hamilton Ontario patient dies of cancer, but it is 
noted on her autopsy that had she not died, a full 
hip replacement would have been necessary as a re- 
sult of the radiation overdose. 


November 8, 1985 


Letter from CRPB to AECL requesting additional 
hardware interlocks and changes in software. Letter 
also requested treatment terminated in the event of 
a malfunction with no option to proceed with single 
key-stroke, (under Canada's Radiation Emitting 
Devices Act.) 






November 18, 1985 


Katy Yarbrough files suit against AECL and 
Kennestone Regional Oncology Center. AECL in- 
formed officially of Lawsuit. 


December 1985 


Yakima Valley Memorial Hospital, Yakima Wash- 
ington. A woman being treated with Therac-25 de- 
velops erythema on her hip after one of the treat- 
ments. 


January 31, 1986 


Staff at Yakima sends letter to AECL and speak on 
the phone with AECL technical support supervisor. 


February 24, 1986 


AECL technical support supervisor sends a written 
response to Yakima claiming that Therac-25 could 
not have been responsible for the injuries to the 
female patient. 




T7„„J- T">„„„„ /-<„„„„., /-<„„*„., T"i,,l„„ T"V,„„„ W„,,„„ 



178 



CHAPTER 5. BUSINESS ETHICS CASE STUDIES 



Table 5.12 

Scenario: You are an engineer working for AECL sent to investigate an alleged overdosing incident at 
the Ontario Cancer Foundation in Hamilton. Ontario. The following is the description provided to you of 
what happened: 

On July 26, 1985, a forty-year old patient came to the clinic for her twenty-fourth Therac-25 treatment 
for carcinoma of the cervix. The operator activated the machine, but the Therac shut down after five 
seconds with an HTILT error message. The Therac-25's console display read NO DOSE and indicated a 
TREATMENT PAUSE 

Since the machine did not suspend and the control display indicated no dose was delivered to the patient, 
the operator went ahead with a second attempt at a treatment by pressing the Proceed Command Key, 
expecting the machine to deliver the proper dose this time. This was standard operating procedure, and 
Therac-25 operators had become accustomed to frequent malfunctions that had no untoward [bad] conse- 
quences for the patient. Again the machine shut down in the same manner. The operator repeated this 
process four times after the original attempt — the display showing NO DOSE delivered to the patient each 
time. After the fifth pause, the machine went into treatment suspend, and a hospital service technician was 
called. The technician found nothing wrong with the machine. According to a Therac-25 operator, this 
scenario also was not unusual. 

After treatment, the patient complained of a burning sensation, described as an "electric tingling shock" 
to the treatment area in her hip. . ..She came back for further treatment on July 29 and complained of 
burning, hip pain, and excessive swelling in the region of treatment. The patient was hospitalized for the 
condition on July 30, and the machine was taken out of service. (Description taken from Nancy Leveson, 
Safeware, pp 523-4) 

You give the unit a thorough examination and are able to find nothing wrong. Working with the operator, 
you try to duplicate the treatment procedure of July 26. Nothing out of the ordinary happens. Your 
responsibility is to make a recommendation to AECL and to the Ontario Cancer Foundation. What will it 
be? 

1. Identify key components of the STS 



Part/Level 
of Analy- 
sis 


Hardware 


Software 


Physical 
Surround- 
ings 


People, 
Groups, & 
Roles 


Procedures 


Laws & 
Regula- 
tions 


Data 

& Data 

Structures 















































Table 5.13 

2. Specify the problem: 

2a. Is the problem a disagreement on facts? What are the facts? What are cost and time constraints on 
uncovering and communicating these facts? 

2b. Is the problem a disagreement on a critical concept? What is the concept? Can agreement be reached 
by consulting legal or regulatory information on the concept? (For example, if the concept in question is 
safety, can disputants consult engineering codes, legal precedents, or ethical literature that helps provide 
consensus? Can disputants agree on positive and negative paradigm cases so the concept disagreement can 
be resolved through line-drawing methods? 

2c. Use the table to identify and locate value conflicts within the STS. Can the problem be specified 
as a mismatch between a technology and the existing STS, a mismatch within the STS exacerbated by the 
introduction of the technology, or by overlooked results? 



179 



STS/Value 


Safety (free- 
dom from 
harm) 


Justice (Equity 

& Access) 


Privacy 


Property 


Free Speech 


Hardware/softw; 


ire 










Physical Sur- 
roundings 












People, 

Groups, & 
Roles 












Procedures 












Laws 












Data & Data 
Structures 













Table 5.14 

3. Develop a general solution strategy and then brainstorm specific solutions: 



Problem / So- 
lution Strategy 



Disagreement 



Factual 



Conceptual 



Value Conflict 



Integrate? 



Tradeoff? 



Situational 
Constraints 



Resource?Techni cal?Interest 



Table 5.15 

3a. Is problem one of integrating values, resolving disagreements, or responding to situational constraints? 
3b. If the conflict comes from a value mismatch, then can it be solved by modifying one or more of the 
components of the STS? Which one? 
4. Test solutions: 



Alternative 
/ Test 


Reversibility 


Value: Jus- 
tice 


Value: Re- 
sponsibility 


Value: Re- 
spect 


Harm 


Code 


A#l 














A #2 














A #3 















Table 5.16 

5. Implement solution over feasibility constraints 



Alternative 
Con- 
straint 



Resource 



Interest 



Technical 



continued on next page 



180 



CHAPTER 5. BUSINESS ETHICS CASE STUDIES 





Time 


Cost 


Individual 


Organization Legal/ So- 
cial 


Available 
Techno- 
logy 


Manufactur; 


#1 
















#2 
















#3 

















Table 5.17 



5.4 Toysmart Case Exercises - Student Module ° 

HOW TO EDIT: Write your module for a student audience. To complete or edit the sections 
below erase the provided textual commentaries then add your own content using one or more of 
the following strategies: 

- Type or paste the content directly into the appropriate section 

- Link to a published CNX module or an external online resource 
using the ''Links'' tabs (see example on the right) 

- Link to a document or multimedia file within the content after 
uploading the file using the ''Files'' tab (see example below) 

- Cite content not available online 



Word Version of this Template 

This media object is a downloadable file. Please view or download it at 
< EAC TK STD TEMPLATE.doO 

Figure 5.3: This is an example of an embedded link. (Go to "Files" tab to delete this file and replace 
it with your own files.) 



5.4,1 Introduction 

In this module you will study a real world ethical problem, the Toysmart case, and employ frameworks based 
on the software development cycle to (1) specify ethical and technical problems, (2) generate solutions that 
integrate ethical value, (3) test these solutions, and (4) implement them over situation-based constraints. 
This module will provide you with an opportunity to practice integrating ethical considerations into real 
world decision-making and problem-solving in business and computing. This whole approach is based on an 
analogy between ethics and design (Whitbeck). 

Large real world cases like Toysmart pivot around crucial decision points. You will take on the role of 
one of the participants in the Toysmart case and problem-solve in teams from one of three decision points. 



°This content is available online at <http://cnx.Org/content/ml4789/l.4/>. 



181 

Problem-solving in the real world requires perseverance, moral creativity, moral imagination, and reason- 
ableness; one appropriates these skills through practice in different contexts. Designing and implementing 
solutions requires identifying conflicting values and interests, balancing them in creative and dynamic solu- 
tions, overcoming technical limits, and responding creatively to real world constraints. 

Each decision point requires that you take up the position of a participant in the case and work through 
decision-making frameworks from his or her perspective. You may be tempted to back out and adopt an 
evaluative posture from which to judge the participants. Resist this temptation. This module is specifically 
designed to give you practice in making real world decisions. These skills emerge when you role play from 
one of the standpoints within the case. You will learn that decision-making requires taking stock of one's 
situation from within a clearly defined standpoint and then accepting responsibility for what arises from 
within that standpoint. 

Cases such as Toysmart are challenging because of the large amount of information gathering and sorting 
they require. Moral imagination responds to this challenge by providing different framings that help to filter 
out irrelevant data and structure what remains. Framing plays a central role in problem specification. For 
example, Toysmart could be framed as the need to develop more effective software to help negotiate the 
exchange of information online. In this case, a software programming expert would be brought in to improve 
P3P programs. Or it could be framed as a legal problem that requires ammending the Bankruptcy Code. 
What is important at this stage is that you and your group experiment with multiple framings of the case 
around your decision point. This makes it possible to open up avenues of solution that would not be possible 
under one framing. 

Tackling large cases in small teams also helps develop the communication and collaboration skills that 
are required for group work. Take time to develop strategies for dividing the work load among your team 
members. The trick is to distribute equally but, at the same time, to assign tasks according the different 
abilities of your team members. Some individuals are better at research while others excell in interviewing 
or writing. Also, make sure to set aside time when you finish for integrating your work with that of your 
teammates. Start by quickly reviewing the information available on the case. This is called "scoping the 
case." Then formulate specific questions to focus further research on information relevant to your problem 
solving efforts. This includes information pertinent to constructing a socio-technical analysis, identifying key 
"embedded" ethical issues, and uncovering existing best and worst practices. 

A case narrative, STS (socio-technical system) description, and two ethical reflections have been published 
at http://computingcases.org. This module also links to websites on bankruptcy and privacy law, the Model 
Business Corporation Act, consumer privacy information, and the TRUSTe website. 

5.4.1.1 Toysmart Narrative 

Toysmart was a Disney-supported company that sold educational toys online from December 1998 to May 
2000. After disappointing Christmas sales in 1999, Disney withdrew its financial support. The greatly 
weakened dot-com company lasted less than a year after this. On May 22, 2000, Toysmart announced that 
it was closing down and brought in a consulting firm, The Recovery Group, to evaluate its assets, including 
a customer data base of 260,000 profiles, each worth up to $500. 

Fierce opposition emerged when Toysmart placed ads in the Wall Street Journal and the Boston 
Globe to sell this data base. Customer interest groups pointed out that Toysmart had promised not to 
share customer information with third parties. Toysmart also prominently displayed the TRUSTe seal which 
testified further to the company's obligations to respect customer privacy and security. Selling this data to 
third parties would break Toysmart promises, violate TRUSTe policies, and undermine consumer confidence 
in the security and privacy of online transactions. Toysmart's obligations to its customers came into direct 
conflict with its financial obligations to its investors and creditors. 

TRUSTe reported Toysmart's intention to sell its data base to the FTC (Federal Trade Commission) who 
on July 10, 2000 filed a complaint "seeking injunctive and declaratory relief to prevent the sale of confidential, 
personal customer information" (FTC article) Toysmart's promise never to share customer PII with third 
parties provided the legal foundation for this complaint. According to the FTC, Toysmart "violated Section 
5 of the FTC Act by misrepresenting to customers that personal information would never be shared with 



182 



CHAPTER 5. BUSINESS ETHICS CASE STUDIES 



third parties, then disclosing, selling, or offering that information for sale." Finally, because it collected data 
from children under 13 who entered various contests offered on its website, Toysmart was also cited for 
violating the Children's Online Privacy Protection Act or COPPA. 

The FTC reached a settlement with Toysmart. The bankrupt dot-com must "file an order in the 
bankruptcy court prohibiting the sale of its customer data as a 'stand-alone asset'. In other words, the 
rights bundled in the liquidation and sale of Toysmart did not include the liberty of buyers to dispose of 
the asset in whatever way they saw fit. According to the negotiated settlement, buyers were bound by the 
commitments and promises of the original owners. Toysmart creditors "can sell electronic assets only if the 
purchasing company abided by the same privacy policy." In essence, the FTC asked Toysmart creditors to 
honor the spirit, if not the letter, of Toysmart's original promise to its customers not to sell their PII to 
third parties. Creditors now had to guarantee that (1) the buyer had the same basic values as Toysmart (for 
example, a commitment to selling quality, educational toys), (2) the buyer use the data in the same way that 
Toysmart had promised to use it when collecting it, and (3) the buyer would not transfer the information to 
third parties without customer consent. In this way, the settlement proposed to protect Toysmart customer 
privacy interests while allowing creditors to recover their losses through the sale of the bankrupt company's 
"crown jewel", its customer data base. 

On August 17, 2000, the Federal Bankruptcy Court declined to accept the Toysmart-FTC settlement. 
Instead, they argued that Toysmart and the FTC should wait to see if any parties willing to buy the data 
base would come forward. The Bankruptcy Court felt that potential buyers would be scared off by the FTC 
suit and the pre-existing obligations created by Toysmart promises and TRUSTe standards. Should a buyer 
come forth, then they would evaluate the buyer's offer in terms of the FTC-Toysmart settlement designed 
to honor the privacy and security commitments made to Toysmart customers. 

A final settlement was reached on January 10, 2001. When a buyer did not come forward, Buena Vista 
Toy Company, a Disney Internet subsidiary who was also a major Toysmart creditor, agreed to buy the data 
base for $50,000 with the understanding that it would be immediately destroyed. The data base was then 
deleted and affidavits were provided to this effect. 



5.4.1.2 Toysmart Chronology 



Time Line 



1997 


David Lord, former college football player, come to 
work for Holt Education Outlet in Waltham, Mass. 


December 1998 


Lord and Stan Fung (Zero Stage Capital) buy 
Holt Education Outlet and rename it "Toysmart." 
(Lorek) Toysmart focuses on providing customers 
with access to 75,000 toys through online catalogue. 
(Nashelsky). 


August 1999 


Toysmart turns down a 25 million offer from an 
investment firm. Accepts Disney offer of 20 million 
in cash and 25 million in advertising, 


continued on next page 



183 



September 1999 


Toysmart post privacy policy which promises not to 
release information collected on customers to third 
parties. At about this time, Toysmart receives per- 
mission from TRUSTe to display its seal certifying 
thatToysmart has adopted TRUSTe procedures for 
protecting privacy and maintaining information se- 
curity. 


Christmas 1999 


After disappointing Christmas toy sales, Disney 
withdraws its support from Toysmart. 


April 2000 


COPPA goes into effect. (Childhood Online Pri- 
vacy Protection Act) Prohibits soliciting informa- 
tion from children under 13 without parental con- 
sent. 


June 2000 (approximately) 


Toysmart erases 1500 to 2000 customer profiles 
from data base to comply with COPPA (informa- 
tion collected after law went into effect) 


May 22, 2000 


Toysmart announces that it is closing its operations 
and selling its assets. Its initial intention is to reor- 
ganize and start over. 


June 9, 2000 


Toysmart creditors file an involuntary bankruptcy 
petition rejecting Toysmart proposal to reorganize. 
They petition the U.S. Trustee to form a Creditors 
Committee to oversee the liquidation of Toysmart 
assets. 


June 23, 2000 


Toysmart consents to involuntary bankruptcy peti- 
tion. Files Chapter 11 bankruptcy. It rejects reor- 
ganization and works with lawyers and the Recov- 
ery Group to liquidate its assets. 


June 2000 


Recovery Group analyzes Toysmart assets and iden- 
tifies its customer information data base as one of 
its most valuable assets (a "crown jewel") 


June 9, 2000 


Disney subsidiary, acting as Toysmart creditor, 
places ads in Wall Street Journal and Boston 
Globe offer Toysmart customer data base for sale. 


After June 9, 2000 


TRUSTe discovers Toysmart ad. Informs FTC 
(Federal Trade Commission) that selling of cus- 
tomer data base to third parties violates TRUSTe 
guidelines and violates Toysmart 's promises to cus- 
tomers(13,2) 


continued on next page 



184 



CHAPTER 5. BUSINESS ETHICS CASE STUDIES 



July 10, 2000 


FTC files complaint against Toysmart "seeking in- 
junctive and declaratory relief to prevent the sale of 
confidential, personal customer information." Dis- 
trict attorneys of 41 states also participate in com- 
plaint against Toysmart. 


July 27, 2000 


Hearing by U.S. Bankruptcy Court on Toysmart 
case. Includes Toysmart proposal to sell customer 
data base. 


Late July 2000 


FTC and Toysmart reach settlement. Toysmart 
can only sell customer information to a third part 
who shares Toysmart values and agrees to carry out 
same privacy policy as Toysmart. 


Late July 2000 


Federal bankruptcy court rejects FTC and Toys- 
mart settlement. Suggests waiting to see if a buyer 
comes forth. 


January 10, 2001 


Walt Disney Internet subsidiary (Buena Vista Toy 
Company?) pays Toysmart $50,000 for its data 
base. Toysmart then destroys the data base and 
provides confirming affidavit. (18,2) 



Insert paragraph text here. 



Table 5.18: Chronology of Toysmart Case 



5.4.1.3 Supporting Documents and Tables 

Toysmart Creditors 



Creditor 


Description 


Debt 


Impact 


Zero Stage Capital 


Venture Capital Firm 


4 million 




Citibank 




4 million 




Arnold Communica- 
tions 




2.5 million 




Children's Television 
Workshop 




1.3 million 




Data Connections 


Set up high speed ca- 
ble and fiber optics for 
Toysmart 


85,000 


Data Connections took 
out loan to keep solvent 


continued on next page 



185 



Integrated Handling 


Set up packaging and 


40,000 


Requires dot-coms to 


Concepts 


handling system for 




pay up front after Toys- 




Toysmart 




mart experience 


Blackstone 


Software business 


45,000 


"It puts us in jeopardy 
as well" 


PAN Communica- 


"Public relations 


171,390 


Turns down deals with 


tions 


agency specializing in 




dot-com companies and 




e-business" 




requires up-front pay- 
ments 



Table 5.19: Source Lorek 



Insert paragraph text here. 



5.4.1.4 Intermediate Moral Concept: Informed Consent 
Concept and Definition 

• Informed Consent: The risk bearer consents to taking on the risk on the basis of a complete under- 
standing of its nature and breadth. 

• Belmont Report: "subjects, to the degree that they are capable, be given the opportunity to choose 
what shall or shall not happen to them." 

• "This opportunity is provided when adequate standards for informed consent are satisfied." 

• Quotes take from Belmont Report 

Arguments for Free and Informed Consent as a Moral Right 

• Free and informed consent is essential for the exercise of moral autonomy. Absence implies force, 
fraud, or manipulation all of which block the exercise of moral autonomy. 

• The standard threat occurs when crucial risk information is not communicated to risk taker. This 
could be because the risk taker cannot appreciate the risk, because the mode of communication is 
inadequate, or because the information has been covered up. Given this standard threat, free and 
informed consent is vulnerable; it must be protected. 

• Informed consent must be shaped around its feasibility, that is, the ability of the duty holder to 
recognize and respect this right in others. If private individuals exercise their right as a veto, then they 
can block socially beneficial projects. There are also serious problems concerning children, mentally 
challenged adults, and future generations. Finally, it may not be possible or feasible to know all risks 
in advance. 



Conditions for Recognizing and Respecting Right 

• From Belmont Report 

• Information: research procedure, their purposes, risks and anticipated benefits, alternative procedures 
(where therapy is involved), and a statement offering the subject the opportunity to ask questions and 
to withdraw at any time from the research. 

• Comprehension: manner and context in which information is conveyed is as important as the infor- 
mation itself. 

• Voluntariness: an agreement to participate in research constitutes a valid consent only if voluntarily 
given. This element of informed consent requires conditions free of coercion and undue influence. 

Other Legal and Moral Frameworks 



186 CHAPTER 5. BUSINESS ETHICS CASE STUDIES 

• Institutional Research Boards or IRBs now require documentation of informed consent on research 
projects carried out under the university's auspicies. This is in response to requirements by granting 
agencies such as the National Institute for Health and the National Science Foundation. 

• Consenting to the transfer of PII (personal identifying information) online:opt-in and opt- 
out. 

• Opt-in: Information is transferred only upon obtaining express consent. Default is not transferring 
information. 

• Opt-in: Information transfer is halted only when person to whom information applies does something 
positive, i.e., refuses to consent to transfer. Default is on transferring the information. 

• Liability Rules and Property Rules: These also have to do with consent. Sagoff makes this 
distinction with reference to activities that have an impact on the environment, an injunction referring 
to liability rules stops the activity to protect the individual who proves impact. Property rules require 
only that the producer of the environmental impact compensate the one who suffers the impact. 

Cases Employing Informed Consent 

• Therac-25: Patients receiving radiation therapy should be made aware of the risks involved with 
treatment by the machine. Free and informed consent is involved when shutting down the machines to 
investigate accident reports or continuing operating the machines while investigating accident reports. 
In both cases, it is necessary, under this right, to let patients know what is going on and their risks. 

• Toysmart Case: Toysmart creditors are about to violate Toysmart's promise not to transfer customer 
information profiles to third parties. This transfer can occur, morally, but only with the express consent 
of the customers who have provided the information. The devil is in the details. Do opt-in or opt-out 
procedures best recognize and respect free and informed consent in this case? 

• Hughes Case: Hughes customers want their chips right away and are pressuring Saia and crowd to 
deliver them. Would they consent to renegotiating the conditions under which environmental tests can 
be skipped? 

5.4,2 What you need to know . . . 

5.4.2.1 What you need to know about socio-technical systems 

1. STS have seven broad components: hardware, software, physical surroundings, peo- 
ple/groups/roles, procedures, laws, and data/data structures. 

2. Socio-technical systems embody values 

• These include moral values like safety, privacy, property, free speech, equity and access, and security. 
Non-moral values can also be realized in and through Socio Technical Systems such as efficiency, cost- 
effectiveness, control, sustainability, reliability, and stability. 

• Moral values present in Socio Technical Systems can conflict with other embedded moral values; for 
example, privacy often conflicts with free speech. Non-moral values can conflict with moral values; 
developing a safe system requires time and money. And, non-moral values can conflict; reliability 
undermines efficiency and cost effectiveness. This leads to three problems that come from different 
value conflicts within Socio Technical Systems and between these systems and the technologies that 
are being integrated into them. 

• Mismatches often arise between the values embedded in technologies and the Socio Technical Sys- 
tems into which they are being integrated. As UNIX was integrated into the University of California 
Academic Computing STS (see Machado case at Computing Cases) , the values of openness and trans- 
parency designed into UNIX clashed with the needs of students in the Academic Computing STS at 
UCI for privacy. 

• Technologies being integrated into Socio Technical Systems can magnify, exaggerate, or exacerbate 
existing value mismatches in the STS. The use of P2P software combined with the ease of digital 
copying has magnified existing conflicts concerning music and picture copyrights. 



187 

• Integrating technologies into STSs produces both immediate and remote consequences and impacts. 

3. Socio-technical systems change 

• These changes are bought about, in part, by the value mismatches described above. At other times, 
they result from competing needs and interests brought forth by different stakeholders. For example, 
bicycle designs, the configuration of typewriter keys, and the design and uses of cellular phones have 
changed as different users have adapted these technologies to their special requirements. 

• These changes also exhibit what sociologists call a "trajectory", that is, a path of development. Tra- 
jectories themselves are subject to normative analysis. For example, some STSs and the technologies 
integrated into them display a line of development where the STS and the integrated technology are 
changed and redesigned to support certain social interests. The informating capacities of computing 
systems, for example, provide information which can be used to improve a manufacturing processes 
can or to monitor workers for enhancing management power. (See Shoshanna Zuboff, The Age of 
the Smart Machine 

• Trajectories, thus, outline the development of STSs and technologies as these are influenced by internal 
and external social forces. 

In this section, you will learn about this module's exercises. The required links above provide information on 
the frameworks used in each section. For example, the Socio- Technical System module provides background 
information on socio-technical analysis. The "Three Frameworks" module provides a further description of 
the ethics tests, their pitfalls, and the feasibility test. These exercises will provide step by step instructions 
on how to work through the decision points presented above. 
For more information see Huff and Jawer below. 
Decision Point One: 

You are David Lord, a former employee of Holt Educational Outlet, a manufacturer of educational toys 
located in Waltham, Mass. Recently, you have joined with Stan Fung of Zero Stage Capital, a venture 
capital firm to buy out Holt Educational Outline. After changing its name to Toysmart, you and Fung 
plan to transform this brick and mortar manufacturer of educational toys into an online firm that will link 
customers to a vast catalogue of educational, high quality toys. Designing a website to draw in toy customers, 
linking to information on available toys, setting up a toy distribution and shipping system, and implementing 
features that allow for safe and secure online toy purchases will require considerable financing. But, riding 
the crest of the dot-com boom, you have two promising options. First, a venture capital firm has offered 
you $20,000,000 for website development, publicity, and other services. Second, Disney has offered the same 
amount for financing, but has added to it an additional $25,000,000 in advertising support. Disney has a 
formidable reputation in this market, a reputation which you can use to trampoline Toysmart into prominence 
in the growing market in educational toys. However, Disney also has a reputation of micro-managing its 
partners. Develop a plan for financing your new dot-com. 

Things to consider in your decision-making: 

1. What are Toysmart values? What are Disney values? Would Disney respect Toysmart 's values? 

2. What synergies could result from working with Disney? For example, could you share information on 
customers? You could feed your customer profiles to Disney in exchange for their customer profiles. 
What kind of data managing technology would be required for this? What ethical problems could arise 
from transferring customer identifying information to third parties? 

3. What kind of commitment would you be willing to make to Disney in terms of product and sales? How 
should Disney reciprocate? For example, how long should they stick with you through sales that fall 
short of projections? 

Decision Point Two: 

You work for Blackstone, "an 18-person software business." You have been asked by Toysmart to provide 
software the following functions: (1) designing a webpage that would attract customers and communicate 
Toysmart Values, (2) advise Toysmart on its privacy and data security policy including whether to register 



188 CHAPTER 5. BUSINESS ETHICS CASE STUDIES 

with an online trust, security measures to protect customer data during online transactions, and measures 
to prevent unauthorized access to customer data while stored, and (3) a comprehensive online catalogue 
that would provide customers with access to educational toys from a variety of small busines manufacturers. 
An example of small toy manufacturers to which Toysmart should be linked is Brio Corporation which 
manufactures wooden toys such as blocks, trains, and trucks. Develop general recommendations for Toysmart 
around these three areas. 

Information for this scenario comes from Laura Lorek, "When Toysmart Broke," 
http://www.zdnet.eom/eweek/stories/general/0, 1101, 2612962, 00. html. Accessed July 16, 2001. 

Things to consider in your decision-making 

• Toysmart is a fairly new dot-com. While it is supported by Disney, it is still a risky venture. Should 
you ask them for advance payment for whatever services you render? What kind of policies does your 
company have for identifying and assessing financial risk? 

• What kind of privacy and data security policy should you recommend to Toysmart? What kind of 
values come into conflict when a company like Toysmart develops and implements privacy and data 
security measures? (Use your STS description to answer this question.) 

• Should Toysmart become bankrupt, their data base would turn into a valuable asset. What recom- 
mendations should you make to help Toysmart plan around this possibility? What values come into 
conflict when planning to dispose of assets during bankruptcy proceedings? What kind of obligations 
does a company take on during its operation that continue even after it has become bankrupt? 

• Using the link provided with this module, visit the TRUSTe website and find its white paper on 
developing a privacy policy. Evaluate this privacy policy for Toysmart. What benefits can a strong 
privacy policy bring to a dot-com? Should Toysmart work to qualify to display the TRUSTe seal on 
its website? Examine TRUSTe procedures for transferring confidential customer PII to third parties? 
What obligations will this create? Would this over-constrain Toysmart? 

Decision Point Three: 

You work for PAN Communications and have been providing advertising services for Toysmart. Now you 
find out that Toysmart has filed a Chapter 11 bankruptcy, and it has an outstanding debt to your company 
for $171,390. As a part of this filing procedure, Toysmart has reported its assets at $10,500,000 with 
debts of $29,000,000. Toysmart creditors, including PAN Communications, have petitioned the Office of the 
United States Trustee for a "Creditors' Committee Solicitation Form." This will allow for the formation of 
a committee composed of Toysmart creditors who decide on how the assets of the bankrupt firm will be 
distributed. You, because of your knowledge of bankruptcy and accounting procedures, have been asked 
to represent your company on this committee. This bleak situation is somewhat remedied by the customer 
data base that Toysmart compiled during its operation. It contains profiles of the PII (personal identifying 
information) of 260,000 individuals. Because selling educational toys is profitable, there is a good chance 
that this data base could be sold for up to $500 a profile to a third party. Should you recommend selling 
this data base? Should Toysmart customers be notified of the pending transfer of their PII and, if so, how 
should they be notified? 

Here are some constraints that outline your decision 

• As a member of the Creditors' Committee, you have a fiduciary duty to Toysmart creditors in work- 
ing to distribute fairly the remaining Toysmart assets. This would, all things being equal, lead to 
recommending selling the Toysmart customer data base 

• There are some provisions in the bankruptcy code that may require or allow overriding fiduciary duties 
given prior legal commitments made by Toysmart. These commitments, in the form of strong privacy 
guarantees made to customers by Toysmart on its webpage, may constitute an "executory contract." 
See the Legal Trail table in the Toysmart case narrative and also Larren M. Nashelsky, "On-Line 
Privacy Collides With Bankruptcy Creditors," New York Law Journal, New York Law Publishing 
Company, August 28, 2000. 



189 

• Finally, Nashelsky makes an interesting argument. While deontological considerations would require 
setting aside creditor interests and honoring Toysmart privacy promises, a justice-based argument 
would recommend a compromise. Bankruptcy proceedings start from the fact that harm (financial) 
has been done. Consequently, the important justice consideration is to distribute fairly the harms 
involved among the harmed parties. Harm distributions are correlated with benefit distributions. 
Because Toysmart customers benefited from Toysmart offerings, they should also bear a share of the 
harms produced when the company goes bankrupt. This requires that they allow the distribution of 
their PII under certain conditions. 

Things to consider in your decision-making 

• How do you balance your obligations to PAN with those to other Toysmart creditors as a member of 
the Creditors' Committee? 

• How should you approach the conflict between honoring Toysmart promises and carrying out Creditor 
Committee fiduciary duties? Do you agree with Nashelsky's argument characterized above? 

• Should the Bankruptcy Code be changed to reflect issues such as these? Should privacy promises 
be considered an "executory contract" that overrides the duty to fairly and exhaustively distribute a 
company's assets? 

• Finally, what do you think about the FTC's recommendation? The Bankruptcy Court's response? 
The final accommodation between Toysmart and Buena Vista Toy Company? 

5.4,3 What you will do ... 

In this section, you will learn about this module's exercises. The required links above provide information on 
the frameworks used in each section. For example, the Socio- Technical System module provides background 
information on socio-technical analysis. The "Three Frameworks" module provides a further description of 
the ethics tests, their pitfalls, and the feasibility test. These exercises will provide step by step instructions 
on how to work through the decision points presented above. 



5.4.4 Exercise One: Problem Specification 

In this exercise, you will specify the problem using socio-technical analysis. The STS section of the Toysmart 
Case narrative (found at Computing Cases) provides a good starting point. In the first table, enter the 
information from the Toysmart case materials pertinent to the general components of a STS, its hardware, 
software, physical surroundings, people/groups/roles, procedures, laws, data. Some examples taken from 
the STS description at Computing Cases are provided to get you started. Then, using the second table, 
identify the values that are embedded in the different components of the STS. For example, PICS (platforms 
for internet content selection) embody the values of security and privacy. Finally, using the data from your 
socio-technical analysis, formulate a concise problem statement. 
Exercise la: 

Read the socio-technical system analysis of the Toysmart case at http://computingcases.org. Fill in the 
table below with elements from this analysis that pertain to your decision point. 

Socio- Technical System Table 



Hardware 



Software 



Physical 
Surround- 
ings 



People/Groups/tRobffliures 



Laws, 

Codes, 

Regulations 



Data and 
Data Struc- 
tures 



continued on next page 



190 



CHAPTER 5. BUSINESS ETHICS CASE STUDIES 



Holt Educa- 


Platforms 


Cyber Space 


Toysmart 


Buying Toys 


COPPA 


Toysmart 


tion Outlet 


for Internet 

Content 

Selection 




the corpora- 
tion 


Online 




Customer 
Data Base 



Table 5.20 



Instructions for Table 1: 



1. Go to http://computingcases.org and review the STS description provided for the Toysmart case. 

2. Pull out the elements of the STS description that are relevant to your decision point. List them under 
the appropriate STS component in the above table. 

3. Think about possible ways in which these components of the Toysmart STS interact. For example, 
what kinds of legal restrictions govern the way data is collected, stored, and disseminated? 

4. Develop your STS table with an eye to documenting possible ethical conflicts that can arise and are 
relevant to your decision point. 



Values Embedded by Relevant Software 



Software / Value 
Embedded 


PICS (Platforms for 
Internet Content Se- 
lection) 


(Platforms for Pri- 
vacy Preferences) 


SSLs (Secured 
Socket Layers) that 
encrypt pages asking 
for SS numbers 


Security 


Embodies privacy and 
security by filtering ob- 
jectionable data. Se- 
curity selected over free 
speech. 


Integrates property with 
security and privacy by 
converting information 
into property. 


Realizes / supports se- 
curity by sealing off do- 
mains of information. 


Privacy 


Embodies privacy and 
security by filtering ob- 
jectionable data. Se- 
curity selected over free 
speech. 


Integrates property and 
security by filtering ob- 
jectionable data. Se- 
curity selected over free 
speech. 


Realizes and supports 
privacy by sealing off 
domains of information. 


Property 




Integrates property with 
security and privacy by 
converting information 
into property 


Realizes and supports 
property by restricting 
access (intellectual 
property protected 
by excluding non- 
authorized access. 


continued on next page 



191 



Free Speech 



Interferes with free 
speech by filtering con- 
tent. Content can be 
filtered with recipient's 
awareness. 



Facilitates by per- 
mitting information 
exchange on model of 
property exchange. But 
this limits exchange by 
assigning it a price. 



Restricts access. 



Justice (Equity and 
Access) 



Could be used to restrict 
access to ideas by filter- 
ing ideas. Thus it could 
cut off flow of informa- 
tion into the intellectual 
commons. 



Facilitates by per- 
mitting information 
exchange on model of 
property exchange. But 
this limits exchange by 
assigning it a price. 



Because it restricts ac- 
cess to a domain, it can 
be used to reduce or 
cut off flow of informa- 
tion into the intellectual 
commons. 



Table 5.21: Values embedded in key software components in the Toysmart case. Emphasis on 
machine/software negotiation for privacy preferences in Internet transactions. 

Exercise lb 

Examine the values embedded in the STS surrounding this decision point. Locate your values under the 
appropriate component in the Toysmart STS. For example, according to the STS description for Toysmart 
found at Computing Cases, the software programs prominent in this case embody certain values; SSLs 
embody security and privacy, P3P property, and PICS privacy. Next, look for areas where key values can 
come into conflict. 

Value Table 



Hardware 


Software 


Physical 
Surround- 
ings 


People/Group 


S/tRobHiures 


Laws/Codes/lligaia^iData 
Structures 


Security 














Privacy 














Property 














Justice (Eq- 
uity/Access) 














Free Speecy 















Table 5.22 



Instructions for Table 2: 

1. This module links to another Connexions module, Socio- Technical Systems in Professional Decision- 
Making. There you will find short profiles of the values listed in the above table: security, privacy, 
property, justice, and free speech. These profiles will help you to characterize the values listed in the 
above table. 

2. The second ethical reflection in the Toysmart case narrative (at Computing Cases) also contains a 
discussion of how property comes into conflict with privacy. 

3. Identify those components of the Toysmart STS that embody or embed value. For example, list the 
values realized and frustrated by the software components discussed in the Toysmart case in the STS 
description. 

4. Look for ways in which different elements of the STS that embed value can interact and produce 
value conflicts. These conflicts are likely sources for problems that you should discuss in your problem 
statement and address in your solution. 



192 CHAPTER 5. BUSINESS ETHICS CASE STUDIES 

Exercise lc: 

Write out the requirements (ethical and practical) for a good solution. Identify the parts of the STS that 
need changing. Then, develop a concise summary statement of the central problem your decision point 
raises. As you design solutions to this problem, you may want to revise this problem statement. Be sure to 
experiment with different ways of framing this problem. 

Harris, Pritchard, and Rabins provide a useful approach to problem specification. See refer- 
ences below. 

5.4,5 Exercise Two: Solution Generation 

Generate solutions to the problem(s) you have specified in Exercise 1. This requires that... 



each member of your group develop a list of solutions, 

the group combines these individual lists into a group list, and... 

the group reduces this preliminary list to a manageable number of refined and clarified solutions for 

testing in the next stage. 



Helpful Hints for Solution Generation 

1. Solution generation requires proficiency in the skills of moral imagination and moral cre- 
ativity. 

Moral imagination is the ability to open up avenues of solution by framing a problem in different ways. 
Toysmart could be framed as a technical problem requiring problem-solving skills that integrate ethical 
considerations into innovative designs. Moral creativity is the ability to formulate non-obvious solutions 
that integrate ethical considerations over various situational constraints. 

2. Problems can be formulated as interest conflicts. In this case different solution options are 
available. 

• Gather Information. Many disagreements can be resolved by gathering more information. Because 
this is the easiest and least painful way of reaching consensus, it is almost always best to start here. 
Gathering information may not be possible because of different constraints: there may not be enough 
time, the facts may be too expensive to gather, or the information required goes beyond scientific or 
technical knowledge. Sometimes gathering more information does not solve the problem but allows for 
a new, more fruitful formulation of the problem. Harris, Pritchard, and Rabins in Engineering Ethics: 
Concepts and Cases show how solving a factual disagreement allows a more profound conceptual 
disagreement to emerge. 

• Nolo Contendere. Nolo Contendere is latin for not opposing or contending. Your interests may 
conflict with your supervisor but he or she may be too powerful to reason with or oppose. So your only 
choice here is to give in to his or her interests. The problem with nolo contendere is that non-opposition 
is often taken as agreement. You may need to document (e.g., through memos) that you disagree with 
a course of action and that your choosing not to oppose does not indicate agreement. 

• Negotiate. Good communication and diplomatic skills may make it possible to negotiate a solution 
that respects the different interests. Value integrative solutions are designed to integrate conflicting 
values. Compromises allow for partial realization of the conflicting interests. (See the module, The 
Ethics of Team Work, for compromise strategies such as logrolling or bridging.) Sometimes it may 
be necessary to set aside one's interests for the present with the understanding that these will be taken 
care of at a later time. This requires trust. 

• Oppose. If nolo contendere and negotiation are not possible, then opposition may be necessary. 
Opposition requires marshalling evidence to document one's position persuasively and impartially. It 
makes use of strategies such as leading an "organizational charge" or "blowing the whistle." For more 
on whistle-blowing consult the discussion of whistle blowing in the Hughes case that can be found at 
computing cases. 



193 

• Exit. Opposition may not be possible if one lacks organizational power or documented evidence. Nolo 
contendere will not suffice if non-opposition implicates one in wrongdoing. Negotiation will not succeed 
without a necessary basis of trust or a serious value integrative solution. As a last resort, one may 
have to exit from the situation by asking for reassignment or resigning. 

3. Solutions can be generated by readjusting different components of the STS. 

• Technical Puzzle. If the problem is framed as a technical puzzle, then solutions would revolve around 
developing designs that optimize both ethical and technical specifications, that is, resolve the technical 
issues and realize ethical value. In this instance, the problem-solver must concentrate on the hardware 
and software components of the STS. 

• Social Problem. If the problem is framed as a social problem, then solutions would revolve around 
changing laws or bringing about systemic reform through political action. This would lead one to focus 
on the people/groups/roles component (working to social practices) or the legal component. 

• Stakeholder Conflict. If the problem is framed as a conflict between different stakeholder interests, 
then the solution would concentrate on getting stakeholders (both individuals and groups) to agree on 
integrative or interest compromising solutions. This requires concentrating on the people/group/role 
component of the STS. (Note: A stakeholder is any group or individual with a vital interest at play in 
the situation.) 

• Management Problem. Finally, if the problem is framed as a management problem, then the 
solution would revolve around changing an organization's procedures. Along these lines, it would 
address the (1) fundamental goals, (2) decision recognition procedures, (3) organizational roles, or (4) 
decision-making hierarchy of the organization. These are the four components of the CID (corporate 
internal decision) structure described in the "Ethical Reflections" section of the Toysmart case. 

• Nota Bene: Financial issues are covered by the feasibility test in the solution implementation stage. 
As such, they pose side issues or constraints that do not enter into the solution generation phase but 
the solution implementation phase. 

4. Brainstorming. Moral creativity, which involves designing non-obvious solutions, forms an 
essential part of solution generation. Here are some guidelines to get you started. 

• Individually make out a list of solutions before the group meeting. Work quickly to realize a pre- 
established quota of five to ten solutions. After composing a quick first draft, revise the list for clarity 
only; make no substantial changes. 

• Start the group brainstorming process by having the group review and assemble all the individual 
solutions. Do this quickly and without criticism. Beginning criticism at this stage will kill the creativity 
necessary for brainstorming and shut down the more timid (but creative) members of the group. 

• Review the list and identify solutions that are identical or overlap. Begin the refining process by 
combining these solutions. 

• Having reviewed all the brainstormed solutions, it is now time to bring in criticism. Begin by eliminating 
solutions with major ethical problems such as those that violate rights, produce injustices, or cause 
extensive harm. 

• Identify but do not eliminate solutions that are ethical but raise serious practical problems. Do not 
initially eliminate an ethical solution because there are obstacles standing in the way of its imple- 
mentation. Be descriptive. Identify and impartially describe the obstacles. Later, in the solution 
implementation stage, you may be able to design creative responses to these obstacles. 

• Identify solutions that do not "fit" your problem statement. These require a decision. You can throw 
out the solution because it does not solve the problem or you can change the problem. If a solution 
does not fit the problem but, intuitively, seems good, this is a sign that you need to take another look 
at your problem statement. 

• Don't automatically reject partial solutions. For example, sending memos through email rather than 
printing them out and wasting paper may not solve the entire recycling problem for your company. 



194 



CHAPTER 5. BUSINESS ETHICS CASE STUDIES 



But it represents a good, partial solution that can be combined with other partial solutions to address 
the bigger problem. 

• Through these different measures, you will gradually integrate criticism into your brainstorming pro- 
cess. This will facilitate working toward a manageable, refined list of solutions for testing in the next 
stage. 

Exercise 3: Develop a Solution List 

• Have each member of your team prepare a solution list and bring it to the next group meeting. Set a 
quota for this individual list, say, 5 to 10 solutions. 

• Prepare a group list out of the lists of the individual members. Work to combine similar solutions. Be 
sure to set aside criticism until the preliminary group list is complete. 

• Make use of the following table. 

• Refine the group list into a manageable number of solutions for testing in the next stage. Combine 
overlapping solutions. Eliminate solutions that do not respond to the requirements and the problem 
statement that you prepared in the previous exercise. Eliminate solutions that violate important ethical 
considerations, i.e., solutions that violate rights, produce harms, etc. 

• Check your refined solution list with your problem statement. If they do not match, eliminate the 
solution or redefine the problem 

Refined Brainstorm List 



Solution Ranking 


Description of Solution 


Justification (fits requirements, fits problem) 


Best Solution 






Second Best Solution 






Third Best Solution 






Fourth Best Solution 






Fifth Best Solution 







Table 5.23 

Anthony Weston provides an illuminating and useful discussion of creative problem solving in 
the reference provided below. 



5.4.6 Exercise Three: Solution Testing 

In this section, you will test the solutions on the refined list your group produced in the previous exercise. 
Three ethics tests, described below, will help you to integrate ethical considerations in the problem-solving 
process. A global feasibility test will help to identify solutions with serious practical problems. Finally, a 
Solution Evaluation Matrix summarizes the results for class debriefings. 

Setting up for the test. 

• Identify the agent perspective from which the decision will be made 

• Describe the action as concisely and clearly as possible. 

• Identify the stakeholders surrounding the decision, i.e., those who will suffer strong impacts (positively 
or negatively) from the implementation of your decision. Stakeholders have a vital or essential interest 
(right, good, money, etc) in play with this decision. 

• In the harm/beneficence test, identify the likely results of the action and sort these into harms and 
benefits. 

• For the reversibility test, identify the stakeholders with whom you will reverse positions. 



195 

• For the public identification test, identify the values, virtues, or vices your action embodies. Associate 
these with the character of the agent. 

Harm/Beneficence Test 

1. What are the harms your solution is likely to produce? What are its benefits? Does this 
solution produce the least harms and the most benefits when compared to the available 
alternatives? 

2. Pitfall — Too much. In this "Paralysis of Analysis" one factor in too many consequences. To avoid 
the fallacy restrict the analysis to the most likely consequences with the greatest magnitude (Magnitude 
indicates the range and severity of impact). 

3. Pitfall — Too Little. A biased or incomplete analysis results when significant impacts are overlooked. 
Take time to uncover all the significant impacts, both in terms of likelihood and in terms of magnitude. 

4. Pitfall — Distribution of Impacts. Consider, not only the overall balance of harms and benefits 
but also how harms and benefits are distributed among the stakeholders. If they are equally or fairly 
distributed, then this counts in the solution's favor. If they are unequally or unfairly distributed, 
then this counts against the solution. Be ready to redesign the solution to distribute better (=more 
equitably or fairly) the harmful and beneficial results. 

Reversibility Test 

1. Would this solution alternative be acceptable to those who stand to be most affected by 
it? To answer this question, change places with those who are targeted by the action and 
ask if from this new perspective whether the action is still acceptable? 

2. Pitfall — Too much. When reversing with Hitler, a moral action appears immoral and an immoral 
action appears moral. The problem here is that the agent who projects into the immoral standpoint 
loses his or her moral bearings. The reversibility test requires viewing the action from the standpoint 
of its different targets. But understanding the action from different stakeholder views does not require 
that one abandon himself or herself to these views. 

3. Pitfall — Too little. In this pitfall, moral imagination falls short, and the agent fails to view the 
action from another stakeholder standpoint. The key in the reversibility test is to find the middle 
ground between too much immersion in the viewpoint of another and too little. 

4. Pitfall — Reducing Reversibility to Harm/Beneficence. The reversibility test requires that one 
assess the impacts of the action under consideration on others. But it is more than a simple listing of 
the consequences of the action. These are viewed from the standpoint of different stakeholders. The 
reversibility test also goes beyond considering impacts to considering whether the action treats different 
stakeholders respectfully. This especially holds when the agent disagrees with a stakeholder. In these 
disagreements, it is important to work out what it means to disagree with another respectfully. 

5. Pitfall — Incomplete survey of stakeholders. Leaving out significant stakeholder perspectives 
skews the results of the reversibility test. Building an excellent death chamber works when one considers 
the action from the standpoint of Hitler; after all, it's what he wants. But treating an individual with 
respect does not require capitulating to his or her desires, especially when these are immoral. And 
considering the action from the standpoint of other stakeholders (say the possible victims of newer, 
more efficient gas chambers) brings out new and radically different information. 

6. Pitfall — Not Weighing and Balancing Stakeholder Positions. This pitfall is continuous with the 
previous one. Different stakeholders have different interests and view events from unique perspectives. 
The reversibility test requires reviewing these interests and perspectives, weighing them against one 
another, and balancing out their differences and conflicts in an overall, global assessment. 

Publicity (or Public Identification) Test 

1. Would you want to be publicly associated or identified with this action? In other words, 
assume that you will be judged as a person by others in terms of the moral values 



196 CHAPTER 5. BUSINESS ETHICS CASE STUDIES 

expressed in the action under consideration. Does this accord with how you would want 
to or aspire to be judged? 

2. Pitfall — Failure to association action with character of agent. In the publicity test, the 
spotlight of analysis moves from the action to the agent. Successfully carrying out this test requires 
identifying the agent, describing the action, and associating the agent with the action. The moral 
qualities exhibited in the action are seen as expressing the moral character of the agent. The publicity 
test, thus, rests on the idea that an agent's responsible actions arise from and express his or her 
character. 

3. Pitfall — Failure to appreciate the moral color of the action. The publicity test assumes that 
actions are colored by the ends or goods they pursue. This means that actions are morally colored. They 
can express responsibility or irresponsibility, courage or cowardice, reasonableness or unreasonableness, 
honesty or dishonesty, integrity or corrpution, loyalty or betrayal, and so forth. An analysis can go 
astray by failing to bring out the moral quality (or qualities) that an action expresses. 

4. Pitfall — Reducing Publicity to Harm/Beneficence Test. Instead of asking what the action says 
about the agent, many reduce this test to considering the consequences of publicizing the action. So 
one might argue that an action is wrong because it damages the reputation of the agent or some other 
stakeholder. But this doesn't go deep enough. The publicity test requires, not that one calculate the 
consequences of wide-spread knowledge of the action under consideration, but that one draws from the 
action the information it reveals about the character of the agent. The consequences of bad publicity 
are covered by the harm/beneficence test and do not need to be repeated in the public identification 
test. The publicity test provides new information by turning from the action to the agent. It focuses 
on what the action (its moral qualities and the goods it seeks) says about the agent. 

Comparing the Test Results: Meta- Tests 

1. The ethics tests will not always converge on the same solution because each test (and the ethical 
theories it encapsulates) covers a different dimension of the action: (1) harm/beneficence looks at the 
outcomes or consequences of the action, (2) reversibility focuses on the formal characteristics of the 
action, and (3) publicity zeros in on the moral character of the agent. 

2. The meta-tests turn this surface disagreement into an advantage. The convergence or divergence 
between the ethics tests become indicators of solution strength and weakness. 

3. Convergence. When the ethics tests converge on a given solution, this indicates solution strength 
and robustness. 

4. Divergence. When tests diverge on a solution — a solution does well under one test but poorly under 
another — this signifies that it needs further development and revision. Test divergence is not a sign 
that one test is relevant while the others are not. Divergence indicates solution weakness and is a call 
to modify the solution to make it stronger. 

Exercise 3: Summarize your results in a Solution Evaluation Matrix 

1. Place test results in the appropriate cell. 

2. Add a verbal explanation to the SEM table. 

3. Conclude with a global feasibility test that asks, simply, whether or not there exist significant obstacles 
to the implementation of the solution in the real world. 

4. Finish by looking at how the tests converge on a given solution. Convergence indicates solution strength; 
divergence signals solution weakness. 



197 



Solution Evaluation Matrix 



Solution/Test 


Harm/Beneficence 


Reversibility 


Publicity (public identification) 


Feasibility 


First Solution 










Second Solution 










Third Solution 










Fourth Solution 










Fifth Solution 











Table 5.24 



The ethics tests are discussed in Cruz and Davis. See references below, 
also discuss value based approaches in the two references below. 



Wike and Brincat 



5.4.7 Exercise Four: Solution Implementation 

In this section, you will trouble-shoot the solution implementation process by uncovering and defusing 
potential obstacles. These can be identified by looking at the constraints that border the action. Although 
constraints specify limits to what can be realized in a given situation, they are more flexible than generally 
thought. Promptly identifying these constraints allows for proactive planning that can push back obstacles 
to solution implementation and allow for realization of at least some of the value embodied in the solution. 
A Feasibility Test focuses on these situational constraints and poses useful questions early on in the 
implementation process. What conditions could arise that would hinder the implementation of a solution? 
Should the solution be modified to ease implementation under these constraints? Can the constraints be 
removed or modified through activities such as negotiation, compromise, or education? Can solution imple- 
mentation be facilitated by modifying both the solution and the constraints? 

Feasibility Constraints 



Category 


Sub-Category 








Resource 


Money/Cost 


Time/Deadlines 


Materials 


Interest 


Organizational(Superviso 


")Legal (laws, regula- 
tions) 


Political/Social 


Technical 


Technology does not ex- 
ist 


Technology patented 


Technology needs modi- 
fication 



Table 5.25 



Resource Constraints: 

• Does the situation pose limits on resources that could limit the realization of the solution 
under consideration? 

• Time. Is there a deadline within which the solution has to be enacted? Is this deadline fixed or 
negotiable? 

• Financial. Are there cost constraints on implementing the ethical solution? Can these be extended 
by raising more funds? Can they be extended by cutting existing costs? Can agents negotiate for more 
money for implementation? 



198 CHAPTER 5. BUSINESS ETHICS CASE STUDIES 

• Resource. Are necessary resources available? Is it necessary to plan ahead to identify and procure 
resources? If key resources are not available, is it possible to substitute other, more available resources? 
Would any significant moral or non-moral value be lost in this substitution? 

Interest Constraints 

• Does the solution threaten stakeholder interests? Could it be perceived as so threatening 
to a stakeholder's interests that the stakeholder would oppose its implementation? 

• Individual Interests. Does the solution threaten the interests of supervisors? Would they take 
measures to block its realization? For example, a supervisor might perceive the solution as undermining 
his or her authority. Or, conflicting sub-group interests could generate opposition to the implementation 
of the solution even though it would promote broader organizational objectives. 

• Organizational Interests. Does the solution go against an organization's SOPs (standard operating 
procedures), formal objectives, or informal objectives? Could acting on this solution disrupt organi- 
zation power structures? (Perhaps it is necessary to enlist the support of an individual higher up in 
the organizational hierarchy in order to realize a solution that threatens a supervisor or a powerful 
sub-group.) 

• Legal Interests. Are there laws, statutes, regulations, or common law traditions that oppose the 
implementation of the solution? Is it necessary to write an impact statement, develop a legal compliance 
plan, or receive regulatory approval in order to implement the solution? 

• Political/Social/Historical Constraints. Would the solution threaten or appear to threaten the 
status of a political party? Could it generate social opposition by threatening or appearing to threaten 
the interests of a public action group such as an environmental group? Are there historical traditions 
that conflict with the values embedded in the solution? 

Technical Constraints 

• Technology does not yet exist. Would the implementation of the solution require breaking new 
technological ground? 

• Technology Protected by Patent. The technology exists but is inaccessible because it is still under 
a patent held by a competitor. 

• Technology Requires Modification. The technology required to implement solution exists but 
needs to be modified to fit the context of the solution. Important considerations to factor in would be 
the extent of the modification, its cost, and how long it would take to bring about the modification. 

5.4,8 Exercise Five: Ethical Perspective Pieces 

Getting Consent to Information Transfer 

Customer Consent If you have followed the case so far, you see that while the money Toysmart owes to 
Citibank may just be a drop in the bucket, the welfare and even survival of other Toysmart creditors depends 
on how much money can be retrieved through the bankruptcy process. The following Ethical Perspective 
argues that the right of creditors for their money cannot be traded off with the right to privacy of Toysmart 
customers profiled in their now valuable data base. These two stakeholders and their stakes — in this case 
rights — need to be integrated as fully as possible. The key lies in the execution of the consumer right to 
be informed and to freely consent to the transfer of their data to third parties This right's execution must 
address three important aspects. 

• Customer consent must be obtained by having them opt-in rather than opt-out of the transfer of 
PII. Opt-in represents a more active, opt-out a more passive mode of consent. By opting into the 
data transfer, Toysmart customers consent explicitly, knowingly, and freely to the transfer of their 
information. Opt-out is passive because unless customers expressly forbid it, the transfer of their PII 
to a third party will occur. The chances are that many customers will consent only if compensated. 



199 

And the mechanics of obtaining positive opt-in consent are complicated. Is this done by email or snail 
mail? How can Toysmart customers be fully informed? What kind of timeline is necessary for their full 
consent? Implimentation of opt-in consent is more adequate morally speaking but much more difficult, 
time-consuming, and costly in its implementation. 

• Any exchange of information must be in accord with TRUSTe standards which Toysmart agreed to 
when they solicited the right to use the TRUSTe seal. TRUSTe has its own standards (they can be 
found through the link above) which reinforce the above discussion of informed consent but also bring 
in other matters. Important here is the utilitarian concern of building and maintaining consumer trust 
to encourage their using the Internet for e-business. Web site certification agencies like TRUSTe exist 
to validate that a web site is trustworthy; but to maintain this validation, customers must know that 
TRUSTe will enforce its standards when websites become reluctant to follow them. TRUSTe must 
be aggressive and strict here in order to maintain the high level of trust they have generated with 
e-business customers. 

• An important part of TRUSTe standards on the transfer of PII to third parties is their insistence 
that these third parties share the values of those who have been given the information. Toysmart 
cultivated a reputation as a trustworthy company devoted to producing safe, high quality, educational 
toys. The customer data base should be transferred only to concerns that share these goals and the 
accompanying values. (What are these?) Did Toysmart compromise on these goals and values when 
they agreed to accept Disney financing and advertising support? What are Toysmart values? What 
are Disney values? 

In conclusion, this perspective piece is designed to get you to think about the right of informed consent, 
whether it can be reconciled with financial interests and rights of Toysmart creditors, and how this right can 
be implemented in the concrete details of this case. It has argued that customer PII can be transferred but 
only with the consent of the customers themselves. It has defined this consent in terms of express opting-into 
the transfer on the part of the customers. It has also argued that the third part must share the values and 
goals of Toysmart, especially those values accompanying Toysmart promises to customers. 

5.4,9 What did you learn? 

This section provides closure to the module for students. It may consist of a formal conclusion that sum- 
marizes the module and outlines its learning objectives. It could provide questions to help students debrief 
and reflect on what they have learned. Assessment forms (e.g., the "Muddiest Point" Form) could be used 
to evaluate the quality of the learning experience. In short, this section specifies the strategy for bringing 
the module to a close. 

In this module, you have. . . 

• studied a real world case that raised serious problems with intellectual property, privacy, security, and 
free speech. Working with these problems has helped you to develop a better "working" understanding 
of these key concepts, 

• studied and practiced using four decision-making frameworks: (1) using socio-technical analysis to 
specify the problem in a complex, real world case, (2) practiced brainstorming techniques to develop 
and refine solutions that respond to your problem, (3) employed three ethics tests to integrate ethical 
considerations into your solutions and to test these solutions in terms of their ethics, and (4) applied 
a feasibility analysis to your solutions to identify and trouble-shoot obstacles to the implementation of 
your ethical solution, 

• explored the analogy between solving ethical and design problems, 

• practiced the skills of moral imagination, moral creativity, reasonableness, and perseverance, and. . . 

• experienced, through key participant perspectives, the challenges of ethics advocacy "under the gun." 

Debrief on your group work before the rest of the class 

1. Provide a concise statement and justification of the problem your group specified 



200 CHAPTER 5. BUSINESS ETHICS CASE STUDIES 

2. Present the refined solution generation list your group developed in exercise 2. 

3. Present and provide a quick summary explanation of the results of your group's solution evaluation 
matrix. 

4. Show your group's feasibility matrix and summarize your assessment of the feasibility of implementing 
the solution alternatives you tested in exercise three. 

Group Debriefing 

1. Were there any problem you group had working together to carry out this case analysis? What were 
the problems and how did you go about solving them? 

2. What problems did you have with understanding and practicing the four frameworks for solving prob- 
lems? How did you go about solving these problems? Does your group have any outstanding questions 
or doubts? 

3. Now that you have heard the other groups present their results, what differences emerged between 
your group's analysis and those of the other groups? Have you modified your analysis in light of the 
analyses of the other groups? If so how? Do the other groups need to take into account any aspects of 
your group's debriefing? 

5.4.10 Toysmart Presentations 

[Media Object] 11 
[Media Object] 12 
[Media Object] 13 

5.4.11 Appendix 

Toysmart References 

1. Morehead, N. Toysmart: Bankruptcy Litmus Test. Wired Magazine, 7/12/00. Accessed 10/4/10. 
http://www.wired.com/techbiz/media/news/2000/07/37517 

2. Toysmart Settles: Database Killed. Associated Press. Accessed through Wired Magazine on 10/4/10 
at http://www.wired.com/politics/law/news/2001/01/41102ere 

3. Kaufman, J. and Wrathall, J. "Internet Customer Data Bases" National Law Journal, September 18, 
2000. Accessed July 12, 2001 Lexis Nexis Academic University. 

4. "FTC Sues Failed Website, Toysmart.com, for Deceptively Offering for Sale Personal Information of 
Website Visitors." July 10, 2000. Accessed at www.ftc.gov on 10/4/10. 

5. "FTC Announces Settlement With Bankrupt Website, Toysmart.com, Regarding Alleged Privacy Pol- 
icy Violations." July 21, 2000. Accessed at www.ftc.com on 10/4/10 

6. "37 Attorneys General Revolve Protection of Consumer Privacy" National Association of Attorneys 
General. AG Bulletin. December 2000. Accessed 2/12/01 through Lexis Nexis Academic University. 

7. Salizar, L. "The Difficulties Practitioners Can Face When Dealing with Dot-Com Bankruptcies." Nov 
2000. Accessed through Lexis Nexis Academic University on 7/12/01. 

8. "FTC Sues Toysmart Over Database" Reuters. 7/10/00 Accessed at 
http://www.wired.com/politics/law/news/2000/07/37484 on 10/4/10. 

9. "On Shaky Ground" Karen. September 2000. American Lawyer Newspapers. Accessed from Lexis 
Nexis Academic University on July 12, 2000. 



"This media object is a downloadable file. Please view or download it at 
<Toysmart _ 2.pptx> 

12 This media object is a downloadable file. Please view or download it at 
<Toysmart _ 3.pptx> 

13 This media object is a downloadable file. Please view or download it at 
<IMC V2 97.doc> 



201 

10. "FTC Files Suit Against Failed Toy Retailer Over Privacy Promise" Associated Press. 7/10/00. Ac- 
cessed 7/18/01. TRUSTe Spokesperson: "Bottom line-it's unacceptable, ethically wrong, and poten- 
tially illegal for a company to say one thing and do something different." 

11. Lorek, Laura. "When Toysmart Broke" Inter@ctive week. August 21, 2000. zdnet.com. Provides 
biographical informaiton on Lord and brick and mortar company Hold Educational Outlet. 

12. Rosencrance, Linda. "FTC Settles With Toysmart" Computer World. July 21, 2000. Accessed 
7/16/01. 

13. Nasholsky, Larren. " Online Privacy Collides with Bankruptcy Creditors: Potential Resolutions fo 
rcomputing Concerns. New Your Law Journal, 8/28/00. Accessed through Lexis Nexis Academic 
Univesity on 7/12/00. 

14. Tavani, H. (2004). Ethics and Technology: Ethical Issues in an Age of Information and 
Communication Technology. Danvers, MA: John Wiley and Sons. 

This optional section contains additional or supplementary information related to this module. It could 
include: assessment, background such as supporting ethical theories and frameworks, technical information, 
discipline specific information, and references or links. 

References 

1. Brincat, Cynthia A. and Wike, Victoria S. (2000) Morality and the Professional Life: Values at Work. 
Upper Saddle River, NJ: Prentice Hall. 

2. Cruz, J. A., Frey, W. J. (2003) An Effective Strategy for Integration Ethics Across the Curriculum in 
Engineering: An ABET 2000 Challenge, Science and Engineering Ethics, 9(4): 543-568. 

3. Davis, M., Ethics and the University, Routledge, London and New York, 1999: 166-167. 

4. Richard T. De George, "Ethical Responsibilities of Engineers in Large Organizations: The Pinto Case," 
in Ethical Issues in Engineering, ed. Deborah G. Johnson (1991) New Jersey: Prentice-Hall: 175-186. 

5. Charles Harris, Michael Pritchard and Michael Rabins (2005) Engineering Ethics: Concepts and 
Cases, 3rd Ed. Belmont, CA: Thomson/Wadsworth: 203-206. 

6. Huff, Chuck and Jawer, Bruce, "Toward a Design Ethics for Computing Professionals in Social Issues 
in Computing: Putting Computing in its Place, Huff, Chuck and Finholt, Thomas Eds. (1994) 
New York: McGraw-Hill, Inc. 

7. Solomon, Robert C. (1999) A Better Way to Think About Business: How Personal Intgrity 
Leads to Corporate Success. Oxford, UK: Oxford University Press. 

8. Anthony Weston. (2001) A Practical Companion to Ethics, 2nd ed. USA: Oxford University 
Press, 2001, Chapter 3. 

9. Carolyn Whitbeck (1998) Ethics in Engineering Practice and Research. U.K. Cambridge Uni- 
versity Press: 55-72 and 176-181. 

10. Wike, Victoria S. (2001) "Professional Engineering Ethics Bahavior: A Values-based Approach," Pro- 
ceedings of the 2001 American Society for Engineering Education Annual Conference and 
Exposition, Session 2461. 

5.4.12 EAC ToolKit Project 

5.4.12.1 This module is a WORK-IN-PROGRESS; the author(s) may update the content as 
needed. Others are welcome to use this module or create a new derived module. You can 
COLLABORATE to improve this module by providing suggestions and/or feedback on your 
experiences with this module. 

Please see the Creative Commons License 14 regarding permission to reuse this material. 



http://creativecommons.org/licenses/by/2.0/ 



202 CHAPTER 5. BUSINESS ETHICS CASE STUDIES 

5.4.12.2 Funded by the National Science Foundation: "Collaborative Development of Ethics 
Across the Curriculum Resources and Sharing of Best Practices," NSF-SES-0551779 

5.5 Ethics and Laptops: Identifying Social Responsibility Issues in 
Puerto Rico 15 

Module Introduction 

While social responsibility has been recognized as one of the key areas of business ethics, much more needs 
to be done to develop frameworks and tools to clarify the concept itself and to implement it in business and 
professional practice on a day-to-day basis. This module will give students the opportunity to practice using 
frameworks and techniques that address these two needs. 

Developing socio-technical system analyses provides an effective means to highlight issues of social re- 
sponsibility. Since socio-technical systems embody values, building their descriptions allows us to read off 
potential problems due to harmful impacts and value conflicts. To facilitate this, you will be building socio- 
technical system descriptions using a grid or matrix that provides the components of socio-technical systems, 
levels under which they can be analyzed, and the values that they tend to embody. Building socio-technical 
system descriptions also requires using methods of participatory observation. These include constructing sur- 
veys and questionnaires, developing interviews, and building day-in-the-life scenarios. This module will help 
you frame and respond to social responsibility issues by providing a framework for socio-technical analysis 
and a set of methodological tools taken from participatory observation. 

Module ml4025 (Social- Technical Systems in Professional Decision Making) provides background infor- 
mation on STSs, their construction and their uses. Links to this module and to the website, Computing 
Cases, can be found in the upper left hand corner of this module. They provide useful background informa- 
tion. This module makes use of a case, Texas Laptops, that was developed by Chuck Huff and C. Nathan 
DeWall for NSF projects, DUE-9972280 and DUE-9980768. 

Texas Laptop Case 

1. In the late 1990's, the Texas State Board of Education proposed the ambitious plan of providing each of 
the state's four million public school students with their own laptop computer. This plan was devised 
to solve several problems confronting Texas public education. 

2. Laptop computers could make educational resources more accessable to students who were faced with 
special challenges like deafness or blindness. Computers offer software options (such as audio books) 
that promise to reach more students than traditional printed textbooks. 

3. Laptops also promised to solve the problem of obsolete textbooks. Texas purchased textbooks for their 
students at considerable costs. The purchasing cycle ran six years. By the end of this cycle, textbooks 
were out of date. For example, in the late 1990's when the laptop plan was proposed, history textbooks 
still referred to the Soviet Union and to the existence of the Berlin Wall. Laptops, on the other hand, 
would present textbook content in digital form which would eliminate printing and shipping costs and 
facilitate updates through online downloads. 

4. Texas business leaders were concerned about the computer literacy of the upcoming generation of 
students. By employing laptops in more and more teaching activities, students would learn how to 
interact with computers while taking advantage of the new and more effective modes of presentation 
offered. 

1. However, adopting laptops also presented problems that critics quickly brought forth. 

2. Teachers would need to learn how to use laptop computers and would have to change their teaching to 
accomodate them in the classroom. 

3. Apparent cost savings disappeared upon further, closer examination. For example, it became clear 
that textbook publishers would not so easily give up the revenues they had come to depend upon that 



5 This content is available online at <http://cnx.Org/content/ml4257/l.3/>. 



203 

came from textbook purchases for public school students. Updates from downloads could turn out to 
be more expensive and eductional software could be coded to restrict access and dissemination. 

4. Further studies indicated that technical support costs would run two to three times initial outlays. 
Keeping laptop hardware and software up and running required technical support and continued in- 
vestment. 

5. Texas found that while some school districts-the richer ones-had already begun projects to integrate 
computing technology, the poorer school districts would require considerable financial support. 

To deal with these problems, Texas carried out several pilot projects that examined the effectiveness of 
laptop integration in select school districts. While several successes were reported a series of problems arose 
that led Texas Board of Educaton officials to postpone the laptop project. First, pilot projects depended on 
donations from private computing vendors. While some were forthcoming, others failed to deliver hardware 
on time and provided only minimal technical support. Second, teachers resisted laptop integration due to 
the extensive investment of time required to appropriate computing skills and the difficulty of modifying 
existing curricula and teaching styles to accomodate laptop hardware and software. Third, at that time the 
available educational software, such as digitalized textbooks, was expensive, inadequately developed, and 
narrowly focused on curricular areas such as writing and math practice. Teachers also began to develop more 
comprehensive and philosophical criticisms of laptop use. Education specialist, Larry Cuban, argued that 
while laptops provided good support for a vocational education, they failed to deliver on other educational 
goals such as teaching children how to interact with their peers and teachers and teaching children the civic 
virtues necessary to become active participants in a democratic form of government. Studies began to appear 
that argued that skills developed through computer use came at the expense of other, more social skills. 

The Texas Laptop plan was never formally implemented beyond the pilot project phase. However, several 
computer integration projects have been carried out in other parts of the country. For example, Larry Cuban 
reports on computer integration projects carried out in Silicon Valley in California. MIT has developed a 
cheap laptop computer for use in developing nations. You can find a link to computer integration projects 
that have been implemented in Philadelphia public schools through the support of the Microsoft Foundation. 

Students in computer ethics classes at the University of Puerto Rico at Mayaguez have looked into the 
feasibility of integrating laptops in the public school socio-technical system in Puerto Rico. They began by 
looking at the project to provide public school teachers with laptops that was carried out in the late 1990's 
under the Pedro Rossello administration. The student research projects came to focus on three problem 
areas. First, they examined whether there were structures in laptop design that made computers unfit 
for use by children. Second, they studied whether social or ethical problems would arise from disposal of 
spent laptops. Third, they investigated the impact on copyright law and intellectual property practices that 
digitalizing printed textbooks would have. 

Exercise 1: Prepare a STS Grid 

• Construct a socio-technical system (STS) grid for public schools in Puerto Rico 

• Using the templates found at ml4025 (Socio- Technical Systems in Professional Decision Making) iden- 
tify the key constituents such as hardware, software, physical surroundings, etc. 

• Select key levels for analysis. For example, you may want to look at the STS from the standpoint of 
individuals (students and teachers), small groups (public school systems), and institutions (education 
and business). 

• Starting with a short list of values, identify the values embedded in the public school STS and, if 
possible, the specific components in which these values are embedded. A good place to start is to see 
how different physical arrangements of the classroom embody different approaches to education. 

Values in STSs 

Values that can be used for exercise 1 include Justice (equity and access), Property, Privacy, Free Speech, 
Responsibility (Safety). More on these values can be found by clicking on the Computing Cases link provided 
in this module. Several of these values are defined in the Ethics of Team Work module, ml3769. 

Exercise 2: Identifying Potential or Latent Problems in STSs 



204 CHAPTER 5. BUSINESS ETHICS CASE STUDIES 

• Choose one of the following three problem areas to help focus your work: (1) value problems that may 
arise when laptops with their current design are integrated in the PR STS; (2) value problems that 
may arise by the digitalization of textbooks and other educational materials; (3) value problems and 
potential harms that may arise during the disposal of spent laptops. 

• Compare values embodied in current laptop design with those embodied in the Puerto Rican public 
school STS. Are there any conflicts? What are these? 

• Look more closely at the Puerto Rican public school STS. Are there any conflicts that will be high- 
lighted, exaggerated, or increased by the integration of laptop computers. 

• Finally, look for potential harms that could occur in the short, middle, and long term future. 

Exercise 3: Develop Counter-Measures to Problems 

• Generate 5 to 10 options to respond to the problems you have identified. Make sure that you include 
the status quo among your options. 

• Check each option against the problems you have identified. Does the option solve the problems 
identified in your STS analysis? Does it integrate the conflicting values and avoid untoward results? 
Does it give rise to new problems? 

• Prepare a short presentation for the class (5 to 10 minutes) where you outline your problem, set forth 
the range of solutions you have identified, and describe and justify your solution. Be sure to address 
issues that may arise when you turn to implementing your solution. 

• Provide a one or two sentence argument that your solution is best for delivering on social responsibility. 

Exercise 4: Evaluate the Microsoft Philadelphia Public Schools Project 

• Listen to/read the news report on the Microsoft Foundation's project to integrate computing technology 
in Philadelphia. (You can find it by clicking on the link in this module.) 

• Is this an example of a corporation carrying out its social responsibility to the surrounding community?. 

• Evaluate Microsoft generally in terms of its social responsibility. 



5.6 Case Analysis and Presentation: Machado 16 

Computer Ethics 

Case Module Template: Machado Case 

By William J. Frey 

Module Abstract: 

This module, designed for the EAC Toolkit (NSF SES 0551779), will test the Toolkit and Connexion's 
ability to network different online and offline sources for ethics across the curriculum. It consists of four com- 
ponents designed to provide tools for an in-depth analysis of the cases found at www.computingcases.org 17 
; it also makes substantial references to the draft manuscript of a textbook in computer ethics entitled 
Good Computing: A Virtue Approach to Computer Ethics under contract with Jones and Bartlett Pub- 
lishing Company. (This book will consist of the cases displayed at Computing Cases — Therac-25, Machado, 
and Hughes Aircraft — and 7 additional cases all developed through NSF projects DUE-9972280 and DUE 
9980768.) 

Module Introduction: 

This module as displayed in Connexions presents the case abstract and timeline both taken from Com- 
puting Cases. It then refers to the website where the following can be found by browsing: 

• case narrative, 

• case history, 



16 This content is available online at <http://cnx.Org/content/ml3818/l.2/>. 
17 http:// www.computingcases.org/ 



205 

• a teaching introduction which also provides a useful overview, 

• an ethical analysis that can be accessed by clicking on the appropriate concept in the table displayed 
(clicking on safety will open a short document that discusses the safety implications of the case) 

• a Socio-Technical Analysis which spells out the different components of the cases socio-technical sys- 
tem such as hardware, software, physical surroundings, people/groups/roles, procedures, laws, and 
data/data structures. 

• supporting documents such as three RFCs (Request for Comments) on the Unix finger command, a 
profile of students at UCI, and an interview with Allen Schiano from the University of California at 
Irvine's Office of Academic Computing. 

These materials all posted at www.computingcases.org 18 provide the background information necessary for 
a detailed and exhaustive case analysis. (A suggestion: since you will be working in groups, divide these 
readings among your group members and take advantage of class time to report to one another on the 
contents of the links you have individually explored. Be sure to triangulate by assigning more than one 
member to each link. This will help to identify and solve problems in interpretation.) 

The case abstract and timeline in this module outline the case. The following decision point taken from 
the Machado case will provide the focus for an in-depth case analysis. You will respond to the decision-point 
by working through a four stage decision making procedure inspired by the standard Software Development 
cycle: 



problem specification, 
solution generation, 
solution testing, and. . . 
solution implementation. 



Module Activities: 

1. Instructor introduces the case based on the abstract and timeline found at www.computingcases.org 19 

2. Students read case abstract, timeline, case decision point, and case analysis exercises. 

3. Students do further research into the case by consulting ComputingCases materials which include 
narratives, histories, supporting documents, and ethical analyses. 

4. Students carry out the activities outlined in the accompanying case exercises by (a) specifying the 
problem raised in the decision point, (b) generating solutions, (c) testing solutions using ethics tests, and 
(d) developing plans for implementing the solution over situational constraints. 

5. Students prepare their case analyses working in small groups. 

6. These groups present their completed analysis to the class in a case-debriefing session. 

7. The instructor concludes by discussing the problem-solving issues and intermediate moral concepts 
raised by the case. 

Machado Abstract: 

In September of 1996, 19 year-old Richard Machado sent email to 59 Asian students at his public college, 
threatening them with phrases like "I will personally make it my life's career to hunt you down and kill you" 
and signed by "Asian Hater." Several of these individuals reported this incident to the Office of Academic 
computing (OAC). One of the recipients was a student employee of the OAC. The administrators of the 
OAC were faced with a decision about how to respond to harassing and threatening email sent over their 
system to students of their University, using their facilities. 

Machado Timeline 



18 http:// www.computingcases.org/ 
19 http:// www.computingcases.org/ 



206 



CHAPTER 5. BUSINESS ETHICS CASE STUDIES 



11/16/95 


Machado sends email threat to New University pa- 
per (UCI) via his roommate's computer. The email 
is traced to the roommate's computer. Roommate 
later said Machado had access to the computerMa- 
chado identified as sender. 


11/21/95 


Warrant for arrest is filed against Machado, issued 
by Irvine Police Department — the warrant is a "no 
bail felony warrant ."Machado consents to a prop- 
erty search. Case given up shortly after — Machado's 
roommate took the blame so he "wouldn't be both- 
ered anymore." 


(Between 1/1/96 and 9/20/96) 


Machado's older brother murdered in armed rob- 
bery prior to following incident; Machado is doing 
poorly in school, getting pressure from family to 
uphold high expectations. 


9/20/96(Friday, 10:54 am) 


Machado sends hate Asians/threat email to about 
59 UCI studentsMachado sent message a second 
time shortly after, when he did not receive replies to 
the first email. Incident brought to the attention of 
Assoc. Director of The Academic Computing Cen- 
ter, by her employees. Machado identified in com- 
puter lab and was asked to leave by Core Services 
manager. 


9/21/96 


Director of OAC reads Machado's email and decides 
that it is a police matter. 


9/24/96(Monday) 


The incident is reported to University Police De- 
partmentAn officer is assigned to the case. 


9/26/96 


Retrieval of surveillance video confirmed Machado 
as the sender. Irving City Police notified and in- 
volved in case. 


9/27/96 


Registrar's office helps police locate Machado's ad- 
dress and phone number. 


9/28/96 


An officer phones Machado's residence and leaves 
messageMachado calls back and agrees to meet with 
an officer that afternoon at 5pm. Two charges filed 
after meeting: Machado (1) knowingly and without 
permission uses computer services and (2) makes 
telephone calls with intent to annoy. 


continued on next page 



207 



11/14/96 


A stolen vehicle report is filed for Machado's sec- 
ond roommate's car.Machado had told one room- 
mate he was borrowing his other roommate's 
car.Machado did not have permission to borrow car. 


11/18/96 


FBI attempts investigation. An agent goes to 
Machado's residence; Machado is not there and 
hasn't been seen there since 11/13. Machado al- 
legedly left with Young's keys on 11/14. Other sus- 
picions: $80 missing from roommate's coin jar; $154 
visa charges to roommate's card, $54 of which were 
unauthorized; calls on 11/10, 11, and 12. 


11/21/96 


FBI agent phones Machado's roommate for confir- 
mation of stolen car/info on Machado's disappear- 
ance. 


11/22/96 


Roommate interviewed. 


11/23/96 


Tammy Machado (Machado's sister) interviewed 
and said Machado had disappeared on the day 
his brother called him to inquire about Machado's 
name appearing in newspaper regarding Asian hate 
mails. Machado denied the reports in the paper to 
his brother; claimed it to be someone else. Tammy 
is informed that court date is set for 11/25 and if 
Richard doesn't show, they would issue a warrant 
for his arrest. 


2/6/97 


Machado is arrested when attempting to enter US 
from Mexico — caught by US Immigration Inspec- 
tor. Machado is reported as looking homeless, hav- 
ing no possessions, looking for construction work in 
Mexico. 


9/16/97 


Machado is charged with 10 counts of interfering 
with a federally protected activity — in this case, 
students attending a university. Machado is told he 
will face up to 10 years if convicted. 


11/12/97 


Trial takes place and on this date a re- 
cess is granted when new information is un- 
covered/presented. Questionnaires were revealed in 
which 9 of the students who got the messages said 
they were not overtly bothered by Machado's email. 


continued on next page 



208 



CHAPTER 5. BUSINESS ETHICS CASE STUDIES 



11/18/97 


Jury deadlocked 9 to 3 in favor of acquittal. Case 
said to have national importance by federal prose- 
cutors, so a second trial was set for 1/27/98. 


2/13/98 


Richard Machado is found guilty on 2 counts of 
civil rights violations. Took only 3 weeks of trial 
to reach verdict. Following conviction, Machado is 
released on a $10,000 bond from custody but is 
turned over to Irvine police on impending auto theft 
charges. Sentencing is postponed until 4/10/98. Pos- 
sible maximum time Machado could serve would be 
1 yr. Machado has already spent 1 yr. in jail await- 
ing trials, tec. Machado is recommended for anger 
& racial tolerance counseling, not allowed on UCI 
campus, and prohibited from having any contact 
with victims. 







Table 5.26 

Scenario #1: 

You are a systems administrator at the Office of Academic Computing at the University of California at 
Irvine and have been asked to modify the Unix system to prevent the reoccurrence of the Machado incident 

Scenario #2: 

You are a systems administrator at the Office of Academic Computing at the University of California at 
Irvine and have been asked to develop an orientation program for students who will use university computing 
laboratories and facilities. Special emphasis is put on preventing a reoccurrence of the Machado incident. 

1. Identify key components of the STS 



Part/Level 
of Analy- 
sis 


Hardware 


Software 


Physical 
Surround- 
ings 


People, 
Groups, & 
Roles 


Procedures 


Laws & 
Regula- 
tions 


Data 

& Data 

Structures 















































Table 5.27 



2. Specify the problem: 

2a. Is the problem a disagreement on facts? What are the facts? What are cost and time constraints on 
uncovering and communicating these facts? 

2b. Is the problem a disagreement on a critical concept? What is the concept? Can agreement be reached 
by consulting legal or regulatory information on the concept? (For example, if the concept in question is 
safety, can disputants consult engineering codes, legal precedents, or ethical literature that helps provide 
consensus? Can disputants agree on positive and negative paradigm cases so the concept disagreement can 
be resolved through line-drawing methods? 

2c. Use the table to identify and locate value conflicts within the STS. Can the problem be specified 
as a mismatch between a technology and the existing STS, a mismatch within the STS exacerbated by the 
introduction of the technology, or by overlooked results? 



209 



STS/Value 


Safety (free- 
dom from 
harm) 


Justice (Equity 

& Access) 


Privacy 


Property 


Free Speech 


Hardware/softw; 


ire 










Physical Sur- 
roundings 












People, 

Groups, & 
Roles 












Procedures 












Laws 












Data & Data 
Structures 













Table 5.28 
3. Develop a general solution strategy and then brainstorm specific solutions: 



Problem / So- 
lution Strategy 



Disagreement 



Factual 



Conceptual 



Value Conflict 



Integrate? 



Tradeoff? 



Situational 
Constraints 



Resource?Techni cal?Interest 



Table 5.29 

3a. Is problem one of integrating values, resolving disagreements, or responding to situational constraints? 
3b. If the conflict comes from a value mismatch, then can it be solved by modifying one or more of the 
components of the STS? Which one? 
4. Test solutions: 



Alternative 
/ Test 


Reversibility 


Value: Jus- 
tice 


Value: Re- 
sponsibility 


Value: Re- 
spect 


Harm 


Code 


A#l 














A #2 














A #3 















Table 5.30 

5. Implement solution over feasibility constraints 



Alternative 
Con- 
straint 



Resource 



Interest 



Technical 



continued on next page 



210 



CHAPTER 5. BUSINESS ETHICS CASE STUDIES 





Time 


Cost 


Individual 


Organization Legal/ So- 
cial 


Available 
Techno- 
logy 


Manufactur; 


#1 
















#2 
















#3 
















Table 5.31 




Machado Summary 




This is an unsupported media type. To view, please see 
http://cnx.org/content/ml3818/latest/Machado F06.ppt 



Figure 5.4: PowerPoint File. 



Chapter 6 

Business Ethics Bowl 



6.1 Practical and Professional Ethics Bowl Activity: Follow- Up In- 
Depth Case Analysis 1 

6.1.1 Module Introduction 

This module provides students with a structure for preparing an in-depth case study analysis based on 
feedback they have received through their participation in an Ethics Bowl competition as part of the 
requirements for courses in Practical and Professional Ethics taught at the University of Puerto Rico at 
Mayaguez. Students viewing this module will find formats for analyzing decision making cases and position 
cases such as the decisions published by the National Society of Professional Engineers Board of Ethical 
Review. They will receive information pertinent to preparing in-depth case analyses, short summaries 
of the case pool for the Ethics Bowl competition, and a summary of procedures for carrying out a group 
self-evaluation. More information on the Engineering Ethics Bowl carried out at UPRM can be found in 
Jose A Cruz-Cruz, William J. Frey, and Halley D. Sanchez, "The Ethics Bowl in Engineering Ethics at the 
University of Puerto Rico - Mayaguez" in Teaching Ethics 4(3): 15-32. 

6.1.2 Choosing Your Case 

1. You must choose one of the two cases you presented on in the Ethics Bowl. (This means the case on 
which you gave your initial presentation. 

2. You may choose either the first round decision-making case or the NSPE Board of Ethical Review Case 

How should you choose your case? 

1. Which case did you find the most interesting, challenging, or fruitful? 

2. On which case did you receive the most interesting feedback from the other team and the judges? 

3. Do you want to make, defend, and implement a decision or analyze a BER decision? 

Once you choose your case, you need to analyze it according to the following steps: 
Decision-Making Cases 



1 This content is available online at <http://cnx.Org/content/ml3759/l.12/>. 

211 



212 



CHAPTER 6. BUSINESS ETHICS BOWL 



Worksheets 


Decision-Making Case 




Identify and state the (ethically) relevant facts 


STS Table (Table + Verbal Explanation) 


Prepare a Socio- Technical Analysis. Fill in the STS 
table (see below) and then verbally describe each 
component. 


Value Table (Table + Written Problem Statement) 


Fill out a Value Table (see below) Use it to identify 
the ethical problem or problems. Summarize this 
by providing a concise problem statement that is 
explicitly tied to the Value Table. 


Brainstorm Lists (initial and refined lists) 


4. Brainstorm solution to the problem or problems. 
Be sure to discuss how list was generated and how it 
was refined. Describe value integration and interest 
negotiating strategies used. 


Solution Evaluation Matrix (Matrix + Verbal Ex- 
planation and Justification) 


5. Compare, evaluate, and rank the solutions 




6. Choose the best available solution. Provide a jus- 
tification summarizing ethical and feasibility con- 
siderations highlighted in Solution Evaluation Ma- 
trix. 


Feasibility Matrix (Matrix + Verbal Explanation) 


7. Develop a plan for implementing your solution. 
Discuss and justify this plan explicitly in terms of 
the specific feasibility considerations in the Feasi- 
bility Matrix. 




Develop and discuss preventive measures (if appli- 
cable) 



Table 6.1 



NSPE-BER Case 



Worksheets 






1. Identify and state the (ethically) relevant facts 


Stakeholders (Matrix + Verbal Explanation) 


2. Identify the stakeholders and their stakes. 


Problem Classification (Matrix + Concise Verbal 
Problem Statement) 


3. Identify the ethical problem or problems 




4. State the BER decision and summarize their 
code-based justification (cite code provisions, sum- 
marize principles, and list relevant precedents) 


continued on next page 



213 



Solution Evaluation (Matrix + detailed verbal ex- 
planation and justification) 


5. Evaluate the BER decision using the three ethics 
tests, code test, and global feasibility test. 




6. Construct a strong counter-position and counter- 
argument to the BER decision 


Solution Evaluation (Matrix + detailed verbal ex- 
planation and justification) 


7. Evaluate counter-position and counter-argument 
using the 3 ethics tests, feasibility test, and code 
test 


Solution Implementation (Feasibility Matrix + Ver- 
bal Explanation) 


8. Evaluate counter-position and counter-argument 
in terms of relevant feasibility considerations. Pro- 
vide a matrix/table + verbal explanation. 



Table 6.2 



6.1.3 In-Depth Analysis: Step by Step 

Description of In-Depth Case Analysis 

Title of Assignment: "In-Depth Case Analysis" 

Due Date for Written Projects:One week after the last class of the semester. 

What is required? 

1. Participation in at two ethics bowl competitions. 

2. Each group will choose from the two cases it debated in the Ethics Bowl a case for a more extended 
analysis carrying out the seven-step decision making framework. They will prepare an extended analysis of 
this case (10 to 20 pages). 

3. Each group will prepare summaries of the 15 cases assigned for the ethics bowl. These summaries 
(a minimum of one page for each case) will be handed in with the extended case study analysis. These 
summaries should include a problem statement, a solution evaluation matrix, and a feasibility matrix. 

4. Each final submission will also include a group self-evaluation. This evaluation will include: 



forms 



a list of the goals each group set for itself 

a careful, justified and documented assessment of your success in reaching these goals 

a careful assessment of what you did and did not learn in this activity 

a discussion of obstacles you encountered and measures your group took to overcome these. 

a discussion of member participation and contribution including the member contribution 

in general what worked and what didn't work for you and your group in this activity 



5. A group portfolio consisting of the materials prepared by your group during the group class activities: 



Virtue Chart (Responsibility) 
Gray Matters Solution Evaluation Matrix 
Rights Chart: Free & Informed Consent 
Group Code of Ethics 



Structure of Written Analysis 

1. A brief summary of the case focusing on the ethically relevant facts. 

2. A Socio- Technical System Table + Short paragraph on each of the seven categories. 

3. A Value Table + a short paragraph on the embedded values you have identified and where they occur in 
the STS. Then state whether you have found any value mismatches, magnified existing value conflicts, 
and remote/harmful consequences. 



214 



CHAPTER 6. BUSINESS ETHICS BOWL 



4. On the basis of your STS analysis and value conflict analysis, provide a short, concise problem state- 
ment. Make sure your the problem you have identified is grounded in your STS and value analysis. If 
not, one or the other (or both) needs to be changed. 

5. A brainstorm list in which you record the solutions your group has designed to solve the problem 
stated above. The rough unrefined list should include around 10 solutions. Then refine this list into 
three. Spend time detailing how you reached your refined list. Did you synthesize rough solutions? On 
what basis did you leave a solution out all together? Did you find other ways of relating or combining 
solutions? Spend time documenting your brainstorming and refining process. Show in detail how you 
came up with the refined list. 

6. Do a comparative evaluation of three of the refined solutions you developed in the previous step. First, 
prepare a solution evaluation matrix that summarizes your comparative evaluation. Use the table 
provided below. Second, provide a verbal account of the solution evaluation and comparison process 
you present in the solution evaluation matrix. 

7. Reach a final decision. Defend your decision using the ethics and feasibility tests. If the decision 
situation in which you are working is a dynamic one, then proppose a series of solutions that you will 
pursue simultaneously, including how you would respond to contingencies that might arise. (You could 
express this in the form of a decision tree.) 

8. Fill out a Feasibility Matrix. See matrix below 

9. Present an implementation plan based on your Feasibility Matrix. This plan should list the obstacles 
that might arise and how you plan to overcome them. (For example, don't just say, "Blow the whistle." 
Discuss when, how, where, to whom, and in what manner. How would you deal with reprisals? Would 
your action seriously disrupt internal relations of trust and loyalty? How would you deal with this?) 
Work out a detailed plan to implement your decision using the feasibility constraints to "suggest" 
obstacles and impedements. 

10. Finally, discuss preventive measures you can take to prevent this type of problem from arising again 
in the future. 

Socio- Technical System Table 



Hardware 


Software 


Physical 
Surround- 
ings 


People, 

Groups, 

Roles 


Procedures 


Laws, 

Statutes, 

Regulations 


Data and 
Data Struc- 
tures 













































Table 6.3 
STS Value Table 



Hardware 



Software 



Physical 
Surround- 
ings 



People, 

Groups, 

Roles 



Procedures 



Laws 



Data 

and Data 
Structures 



continued on next page 



215 



Integrity 
















Justice 
















Respect 
















Responsibili 
for Safety 


ty 














Free 
Speech 
















Privacy 
















Property 

















Table 6.4 







Solution 


Evaluation Matrix 






Solution/Test 


Reversibility 
or Rights 


Harms/Benefi 

or Net Util- 
ity 


ceYirrtue 


Value 


Code 


Global Fea- 
sibility 


Description 


Is the 


Does the 


Does the 


Moral val- 


Does the 


What are 




solution 


solution 


solution 


ues realized? 


solution 


the resource, 




reversible 


produce the 


express and 


Moral values 


violate 


technical, 




with stake- 


best ben- 


integrate 


frustrated? 


any code 


and interest 




holders? 


efit/harm 


key virtues? 


Value con- 


provisions? 


constraints 




Does it 


ratio? Does 




flicts re- 




that could 




honor basic 


the solution 




solved or 




impede 




rights? 


maximize 
utility? 




exacer- 
bated? 




implementa- 
tion? 


Best solu- 














tion 














Best al- 














ternate 














solution 














Worst solu- 














tion 















Table 6.5 



Feasibility Matrix 



Resource Constraints 



Technical 
straints 



Con- 



Interest Constraints 



continued on next page 



216 



CHAPTER 6. BUSINESS ETHICS BOWL 



Time 


Cost 


Available 


Applicable 


Manufactu rPer-son- 


Organiza- 


Legal 


Social, 






mate- 


technol- 


ability 


alities 


tional 




Political, 






rials, 


ogy 










Cultural 






labor, 


















etc 















Table 6.6 



6.1.4 Format 

1. Group, team-written projects are to be 10-20 pages in length, double spaced, with standard 1-inch 
margins, and typewritten. This does not include documentation, appendices, and other notes. 

2. It is essential that you carefully and fully document the resources that you have consulted. The most 
direct way to do this is to include numbered entries in a concluding section entitled, "Works Cited". These 
entries should provide complete bibliographical information according to standard form (Chicago Manual of 
Style or the MLA Manual of Style). Then insert the number of the entry in parenthesis in the text next to 
the passage that is based on it. (Example: "The self is a relation that relates itself to its own self. . .." (4) 
The number "4" refers to the forth item in the "Works Cited" section at the end of your paper.) 

3. Practical norm 5j of the CIAPR code of ethics sets forth the obligation of the professional engineer to 
give others due credit for their work. For this reason, plagiarism will not be tolerated in any form. Possible 
forms of plagiarism include but are not limited to the following: 

• Quoting directly from other sources without documenting (footnote or bibliography) and/or without 
using quotation marks. Claiming that this is an appendix will not excuse this action. Claiming 
ignorance will not excuse this action. 

• Using the ideas or work of others without giving due credit or proper acknowledgment. "Proper ac- 
knowledgment",'' in this context, requires a standard bibliographical reference and the use of quotation 
marks if the material is being directly quoted. 

• If your paper relies exclusively or primarily on extensively quoted materials or materials closely para- 
phrased from the work of others, then it will not be credited as your work even if you document it. To 
make it your own, you have to summarize it in your own words, analyze it, justify it, or criticize it. 

• You will not be credited for material that you translate from English to Spanish unless you add to it 
something substantial of your own. 

• In general, what you appropriate from another source must be properly digested, analyzed, and ex- 
pressed in your own words. If you have any questions on this, please ask me. 

• Any plagiarized document — one which violates the above rules — will be given a zero. You will be given 
a chance to make this up, and the grade on the make-up project will be averaged in with the zero given 
to the plagiarized document. Since this is a group grade, everyone in the group will be treated the 
same, even though the plagiarizer may be only one person. Each member of the group is responsible 
to assure that other members do not plagiarize in the name of the group. (Since the due date for 
the written project is late in the semester, this will probably require that I give the entire group, i.e., 
all members, an Incomplete.) Each member of the group will be held individually responsible in the 
above-described manner for the final content of the written report. 

4. This is not a research project but an exercise in integrating ethics into real world cases. In Chapters 
2 and 3 of Engineering Ethics: Concepts and Cases, the authors present a thorough discussion of the case 
study analysis/problem solving method discussed in class. You also have supporting handouts in your file 
folders from Magic Copy Center as well as materials I have presented directly in class. Engineering Ethics: 
Concepts and Cases also contains several sample case studies that can help guide you in constructing your 
own presentation. What I am looking for is a discussion of the case in terms of the ethical approaches and 
decision-making frameworks we have discussed this semester. You do not need to "wow" me with research 



217 

into other areas peripherally related to the case; you need to show me that you have practiced decision-making 
and made a serious effort to integrate ethical considerations into the practice of engineering. 

5. The usual criteria concerning formal presentations apply when competing in the Ethics Bowl. Dress 
professionally. 

6. You may write your group, team-written project in either Spanish or English. 

7. All competitions will take place in the regular classroom. 

6.1.5 Media Files Beginning Spring 2007 

These media files provide information on the ethics bowl and the follow-up activities including individual 
decision point summaries, in-depth case analysis, and group self-evaluation. They have been integrated into 
the Business Ethics course during the Spring semester, 2008 and will apply from this date on into the future. 

Team Member Evaluation Form 

This media object is a downloadable file. Please view or download it at 
<TEAM MEMBER RATING SHEET.doO 

Figure 6.1: This file contains the team member rating sheet which each group member must fill out 
and turn in with his or her group project. 



Final Project and Group Self-Evaluation Rubrics 

This media object is a downloadable file. Please view or download it at 
<Be_Rubric_S07.doc> 

Figure 6.2: This rubric will be used to grade the in-depth case analysis, the group self-evaluation, and 
the Ethics Bowl case summaries. 



Basic Moral Concepts for Ethics Bowl 

This media object is a downloadable file. Please view or download it at 
<BME_V2_97.doc> 

Figure 6.3: Clicking on this figure will download the basic moral concepts that you will be integrating 
into the ethics bowl and your final in-depth case analysis. You will be asked to show how you worked to 
integrate these concepts in your group self-evaluation. 



218 CHAPTER 6. BUSINESS ETHICS BOWL 



Intermediate Moral Concepts for Ethics Bowl 

This media object is a downloadable file. Please view or download it at 

<IMC_V2_97.doc> 

Figure 6.4: Clicking on this future will open a table that summarizes the intermediate moral concepts 
that are at play in the four cases that are being used in the Ethics Bowl: Hughes, Therac, Toysmart, 
and Biomatrix. 



Ethics Bowl Cases for ADMI 4016: Environment of the Organization 

[Media Object] 2 

6.1.6 Check List 

Breakdown of Project Grade: 

Group Team- Written Project: 200 points, group grade. 

• This is your group's in-depth case analysis 

• It will analyze the decision scenario your group presented on in the ethics bowl 

• Your task is to give a full and comprehensive analysis of a decision point using the tables presented 
above, accompanying verbal descriptions, and carrying out the four-stage problem-solving framework of 
specifying the problem, generating solutions, testing solutions in terms of their ethics, and implementing 
these solutions. 

Nota Bene 

• After the Ethics Bowl, I will provide the class with general feedback and presentations on how to 
prepare the final project. When you submit your final report, I will be looking for how you responded 
to my comments and suggestions and to the comments and suggestions of the judges and the class. 

• Attendance is mandatory for all Ethics Bowl competitions. This is important because you will help 
one another by the comments and discussions that are generated by the presentations. Students 
not competing need to listen actively and respectfully to the presenting group. Keep in mind the 
twin standards of respect and professionalism. I will deduct points from the grades of groups and/or 
individuals who do not listen courteously to the presentations of others or who do not attend class 
during the presentation cycle. 

Nota Bene: 
Check List 

• Each group will turn in this checklist, fully filled out and signed. Checking signifies that 
your group has completed and turned in the item checked. Failure to submit this form 
will cost your group 20 points 

• One page summaries of the 10 Ethics Bowl decision points taken from the Therac-25, Biomatrix, 

Toysmart, and Hughes cases. 

• Group, in-depth analysis of the case your team presented on in the Ethics Bowl. 

• List of Ethically Relevant Facts 

• Socio- Technical System Table + Verbal Explanation 



2 This media object is a downloadable file. Please view or download it at 
<Ethics Bowl Cases.docx> 



219 

• Value Table + Problem Statement + Justification 

• List of Brainstormed Solutions + Descriptin of Refining Process + Refined list 

• Solution Evaluation Matrix + Verbal Comparison of Three Alternatives from refined solution 

list 

• Chosen Solution + Verbal Justification 

• Feasibility Matrix + Solution Implementation Plan concretely described and based on feasibility 

matrix 
• Preventive Measures (if applicable) 

Materials Required from Ethics Bowl 

• Ethics Bowl Score Sheets 

• The decision point your team presented on in the competition 

• The decision point your team commented on in the competition 

Group Self-Evaluation Form including... 

• a list of the goals your group set for itself 

• a carefully prepared, justified, and documented assessment of your group's success in reaching 

these goals 

• a careful assessment of what you did and did not learn in this activity 

• a discussion of obstacles you encountered and the measures your group took to overcome these 

• a discussion of member participation and contribution including the member contriution forms 

• a general discussion of what worked and what did not work for you and your group in this 

activity 

Each member will turn in a filled out Team Member Evaluation Form. This form can be accessed 

through the media file listed above. It is suggested that you do this anonomously by turning in your Team 
Member Evaluation Form in a sealed envelop with the rest of these materials. You are to evaluate yourself 
along with your teammates on the criteria mentioned in the form. Use the scale suggested in the form. 

Group Portfolios Include... 

• Virtue Tables including the moral exemplar profile your group prepared and presented. 

• The justification using the rights framework of the right assigned to your group. This was one 

of the rights asserted by engineers against their corporate employers. 
• A one page summary of how you developed your role in the Incident at Morales "Vista 

Publica." 
• The code or statement of values summary prepared by your group as a part of the Pirate 

Code of Ethics module. This summary focused on one of six organizations: East Texas Cancer Center, 

Biomatrix, Toysmart, Hughes Aircraft, CIAPR, or AECL (in the Therac case). 

Copy-paste this checklist, examine the assembled materials prepared by your group, and check the items 
your group has completed. Then read, copy-paste, and sign the following pledge. 

Group Pledge 

• I certify that these materials have been prepared by those who have signed below, and 
no one else. I certify that the above items have been checked and that those items with 
checkmarks indicate materials that we have turned in. I also certify that we have not 
plagiarized any material but have given due acknowledgment to all sources used. All who 
sign below and whose names are included on the title page of this report have participated 
fully in the preparation of this project and are equally and fully responsible for its results. 

• Member signature here 

• Member signature here 



220 CHAPTER 6. BUSINESS ETHICS BOWL 



• Member signature here 

• Member signature here 

• Member signature here 

• Member signature here 



6.2 Ethics Bowl: Cases and Score Sheets 3 

6.2.1 Module Introduction 

This module is designed to give you a brief orientation in the Ethics Bowl competition. It is designed to 
compliment and complete other modules concerning the ethics bowl that you will find in the Corporate 
Governance course. 

6.2.2 Ethics Bowl Rules (briefly) 

• The moderator will begin the competition by flipping a coin to determine which team will present first. 
If the team that calls wins the toss, they choose whether they or the other team go first. 

• Monday: (1) Team 1 will have one minute to consult and seven minutes to give its initial presentation. 
The presentation must be tied to the question/task given to it by the moderator. (2) Team 2 has a 
minute to consult and seven minutes to make its Commentary on Team l's presentation. Team 2 can 
close its commentary by posing a question to Team 1. (3) Team 1 then has a minute to consult and 
fiveminutes to respond to Team 2's Commentary. (4) Team 1 will then answer questions posed by the 
two peer review teams. Each peer review team will ask a question. A quick follow-up is allowed. The 
peer review question and answer session will go for 15 minutes. (5) The peer review teams will score 
the first half of the competition but not announce the results. 

• Wednesday: The same procedure will occur while reversing the roles between Teams 1 and 2. Thus, 
team 2 will present, team 1 comment, team 2 respond, and then team 2 will answer questions from the 
peer review panels. The peer review panels will add the scores for the second part of the competition 
but will hold off on announcing the results until Friday's class. 

• Friday: The two peer review teams will present and explain their scores. Peer Review teams will take 
note: you're objective is not to criticize or evaluate the debating teams but to provide them feedback 
in terms of the four categories. 

• Debating teams may trade minutes from consulting to presenting. For example, Team 1 may decide to 
take two minutes to consult when given their case and task. This means that they will have 6 minutes, 
instead of 7, to present. 

• Nota Bene: Debating teams and Peer Review teams are not allowed to bring notes into the competition. 
You will be provided with paper to take notes once the competition starts. 

• Even though the national Ethics Bowl competition allows only one presenter, debating teams will be 
allowed to "pass the baton." When one person finishes speaking, another can step in his or her place. 
It is absolutely forbidden that more than one person speak at a time. Also, the competing team's 
speaking time is limited to its commentary. Once that is over, they are instructed to quitely listen. 
Infractions will be followed first by a warning. Second infractions will result in points being taken 
away. 



6.2.3 Competition Time Line 

1. Team 1 Presentation: One minute to consult, seven minutes to present. 

2. Team 2 Commentary: One minute to consult, seven minutes to present. 

3. Team 1 Response to Commentary: One minute to consult, five minutes to respond. 



3 This content is available online at <http://cnx.Org/content/ml3852/l.6/>. 



221 

4. The question and answer session between Team 1 and the Peer Review teams will last 15 minutes 
(running clock). The first peer review team will have 7 minutes 30 seconds for its questions and the 
second will have roughly the same time. 

5. In the second round, the time line is the same while the debating teams change roles. 

6.2,4 Advice to Debating Teams 

• Tell us what you are going to do, do it, and then tell us what you have done. In other words, start your 
presentation with a summary, then launch into the main body of your presentation, and then conclude 
with another summary. This will help the listening audience understand what you are trying to do. 

• Be professional, formal, and courteous. Address yourself to the other team and the peer review team. 
It is a good idea to stand when you are giving your initial presentation. 

• Be sure to communicate your understanding of the scoring criteria. What do you and your team 
understand by intelligibility, ethical integration, feasibility, and moral imagination/creativity? Take 
time to listen to the other team and the peer review teams to gain insights into their understanding. 
During the commentary and the question and answer session you will get crucial clues into what others 
think you have achieved and where you need further work. Use this feedback. 

• Be sure to thank the peer review teams, moderators, and your opponents during and after the compe- 
tition. Such formalities make it possible to penetrate to the deeper practices that underlie the virtue 
of reasonableness. 

• Relax and have fun! You may not have the opportunity to say everything you want to say. One of the 
purposes behind this competition is to help you see just how hard it is to advocate for ethical positions. 
We almost always have to do so under serious constraints such as time limits. Also, remember that 
you have other forums for "getting it said," namely, your group self evaluation and your in-depth 
case analysis. In these places you will be able to discuss these issues in the kind of depth you think 
necessary. 



6.2.5 Advice to the Peer Review Teams on Scoring 

• Remember that all three scoring events of the competition are worth 20 points. The initial presentation, 
the response to the commentary and questions, and the commentary on the other team's presentation 
all count for the same 20 points. 

• Although you have the complete rubric only for the initial presentation, you will score the other parts 
of the presentation based on the four criteria: intelligibility, ethical integration, feasibility and moral 
imagination/creativity. You will score 1 to 5 on each criteria for a total of 20. 

• Three is the middle of the road score. In other words, three is a good, average score. It is not a C-don't 
think of scoring as grading. Start each team off from a default of three. Then move off that default 
only when something exceptionally good or not so good happens. If your scores deviate much from 
straight twelves (36), then you are scoring too high or too low. 

6.2.6 Ethics Bowl Scoring Criteria 

1. Intelligibility includes three skills or abilities: (1) the ability to construct and compare multiple 
arguments representing multiple viewpoints; (2) the ability to construct arguments and provide reasons 
that are clear, coherent, and factually correct; (3) evidence of realizing the virtue of reasonableness by 
formulating and presenting value integrative solutions? 

2. Integrating Ethical Concerns includes three skills: (1) presenting positions that are clearly re- 
versible between stakeholders; (2) identifying and weighing key consequences of positions considered; 
(3) developing positions that integrate values like integrity, responsibility, reasonableness, honesty, 
humility, and justice. 



222 CHAPTER 6. BUSINESS ETHICS BOWL 

3. Feasibility implies that the positions taken and the arguments formulated demonstrate full recognition 
and integration of interest, resource, and technical constraints. While solutions are designed with 
constraints in mind, these do not serve to trump ethical considerations. 

4. Moral Imagination and Creativity demonstrate four skill sets: (1) ability to clearly formulate and 
frame ethical issues and problems; (2) ability to provide multiple framings of a given situation; (3) 
ability to identify and integrate conflicting stakeholders and stakes; (4) ability to generate solutions 
and positions that are non-obvious, i.e., go beyond what is given in the situation. 



6.2,7 Peer Review Team Responsibilities 

• Attend the debate sessions and the feedback session on Friday after the competition. Remember this 
is the capstone event of the course. It looks bad if you do not bother to attend. 

• You team will ask questions during the debate. This will constitute, at a minimum, one question and a 
quick follow up if necessary. You are not to debate with the presenting team. So your questions should 
not be designed to trap them. Rather, seek through your questions to explore seeming weak points, 
unclear statements, and incomplete thoughts. Use your questions to help you line up the debating 
team against the four criteria. 

• Fill out the score sheet and assess the debating teams in terms of intelligibility, integrating ethics, 
feasibility and moral imagination/creativity. 

• Lead, with the other Peer Review team, the feedback sessions. This requires that you prepare a short, 
informal presentation that shows your scoring and then explains it. 

• Always, always, always be courteous in your feedback comments. Try to present things positively and 
proactively. This is difficult but practice now will serve you well later when you are trying to explaibn 
to a supervisor how he or she has made a mistake. 



6.2,8 Media Files with Cases and Score Sheets 



Engineering Ethics Bowl 



This is an unsupported media type. To view, please see 
http://cnx.org/content/ml3852/latest/Revised_ScoreSheet_Tl_V2.doc 



Figure 6.5: Score Sheet Team One. 



223 



Engineering Ethics Bowl 



This is an unsupported media type. To view, please see 
http://cnx.org/content/ml3852/latest/Revised_ScoreSheet_T2_V2.doc 



Figure 6.6: Score Sheet Team Two. 



Ethics Bowl Cases 



This is an unsupported media type. To view, please see http://cnx.org/content/ml3852/latest/Ethics 

Bowl Cases for Spring 2007.doc 

Figure 6.7: Click here to open the word file containing the 12 Ethics Bowl classes for Business Ethics 
Apring 2007. 



Ethics Bowl Cases for Fall 2007 



This is an unsupported media type. To view, please see http://cnx.org/content/ml3852/latest/EB_ 

Fall07 W97.doc 



Figure 6.8: These are the cases for the Ethics Bowl Competition for the Fall Semester in the year 2007. 
These scenarios or decision points are taken from Incident at Morales, Hughes Aircraft Case, Biomatrix 
Case, and Toysmart Case. 



224 CHAPTER 6. BUSINESS ETHICS BOWL 



Debriefing for Ethics Bowl, Round Two 



This is an unsupported media type. To view, please see 
http://cnx.org/content/ml3852/latest/Debriefing_Round_2.ppt 



Figure 6.9: This presentation was given Friday, April 27 to the Ethics Bowl teams that debated on the 
Therac-25 case and the Inkjet case. 



Chapter 7 

Course Procedures 

7.1 Rubrics for Exams and Group Projects in Ethics 1 

7.1.1 Key to Links 

• The first link connects to the Ethics Bowl assignment for engineering and business students. It corre- 
sponds with the Ethics Bowl rubric displayed below. 

• The second link connects to the module on developing reports on computing socio-technical systems. 
It outlines an assignment where computing students carry out an analysis of the impact of a computing 
system on a given socio-technical system. A rubric to this activity used in computer ethics classes is 
provided below. 

• The third link to the Three Frameworks module corresponds to a rubric below that examines how well 
students deploy the frameworks on decision-making and problem-solving outlined by this module. 

• The final link to Computing Cases provides the reader with access to Chuck Huff's helpful advice on 
how to write and use rubrics in the context of teaching computer ethics. 

7.1.2 Introduction 

This module provides a range of assessment rubrics used in classes on engineering and computer ethics. 
Rubrics will help you understand the standards that will be used to assess your writing in essay exams and 
group projects. They also help your instructor stay focused on the same set of standards when assessing the 
work of the class. Each rubric describes what counts as exceptional writing, writing that meets expectations, 
and writing that falls short of expectations in a series of explicit ways. The midterm rubrics break this 
down for each question. The final project rubrics describe the major parts of the assignment and then break 
down each part according to exceptional, adequate, and less than adequate. These rubrics will help you to 
understand what is expected of you as you carry out the assignment, provide a useful study guide for the 
activity, and familiarize you with how your instructor has assessed your work. 

7.1.3 Course Syllabi 

Syllabus for Environments of the Organization 

[Media Object] 2 



1 This content is available online at <http://cnx.Org/content/ml4059/l.9/>. 
2 This media object is a downloadable file. Please view or download it at 
<ADMI4016 F10.docx> 



225 



226 CHAPTER 7. COURSE PROCEDURES 

Syllabus for Business, Society, and Government 

[Media Object] 3 

Business Ethics Course Syllabus 

This media object is a downloadable file. Please view or download it at 
<Business Ethics Spring 2007.doc> 

Figure 7.1: Course Requirements, Timeline, and Links 



Business Ethics Syllabus, Spring 2008 

This media object is a downloadable file. Please view or download it at 
<Syllabus_S08_W97.doc> 

Figure 7.2: This figure contains the course syllabus for business ethics for spring semester 2008. 



Business Ethics Syllabus Presentation 

This media object is a downloadable file. Please view or download it at 
<BE_Intro_F07.ppt> 

Figure 7.3: Clicking on this figure will open the presentation given on the first day of class in Business 
Ethics, Fall 2007. It summarizes the course objectives, grading events, and also provides a PowerPoint 
slide of the College of Business Administration's Statement of Values. 



7.1.4 Rubrics Used in Connexions Modules Published by Author 

Ethical Theory Rubric 

This first rubric assesses essays that seek to integrate ethical theory into problem solving. It looks at a rights 
based approach consistent with deontology, a consequentialist approach consistent with utilitarianism, and 
virtue ethics. The overall context is a question presenting a decision scenario followed by possible solutions. 
The point of the essay is to evaluate a solution in terms of a given ethical theory. 



3 This media object is a downloadable file. Please view or download it at 
<ADMI6055 F10.docx> 



227 



Ethical Theory Integration Rubric 

This media object is a downloadable file. Please view or download it at 
<EE_Midterm_S05_Rubric.doc> 

Figure 7.4: This rubric breaks down the assessment of an essay designed to integrate the ethical theories 
of deontology, utilitarianism, and virtue into a decision-making scenario. 



Decision-Making / Problem-Solving Rubric 

This next rubric assess essays that integrate ethical considerations into decision making by means of three 
tests, reversibility, harm/beneficence, and public identification. The tests can be used as guides in designing 
ethical solutions or they can be used to evaluate decision alternatives to the problem raised in an ethics case 
or scenario. Each theory partially encapsulates an ethical approach: reversibility encapsulates deontology, 
harm/beneficence utilitarianism, and public identification virtue ethics. The rubric provides students with 
pitfalls associated with using each test and also assesses their set up of the test, i.e., how well they build a 
context for analysis. 

Integrating Ethics into Decision-Making through Ethics Tests 

This media object is a downloadable file. Please view or download it at 
<CE_Rubric_S06.doc> 

Figure 7.5: Attached is a rubric in MSWord that assesses essays that seek to integrate ethical consid- 
erations into decision-making by means of the ethics tests of reversibility, harm/beneficence, and public 
identification. 



Ethics Bowl Follow-Up Exercise Rubric 

Student teams in Engineering Ethics at UPRM compete in two Ethics Bowls where they are required to 
make a decision or defend an ethical stance evoked by a case study. Following the Ethics Bowl, each group is 
responsible for preparing an in-depth case analysis on one of the two cases they debated in the competition. 
The following rubric identifies ten components of this assignment, assigns points to each, and provides 
feedback on what is less than adequate, adequate, and exceptional. This rubric has been used for several 
years to evaluate these group projects 

In-Depth Case Analysis Rubric 

This media object is a downloadable file. Please view or download it at 
<EE_FinalRubric_S06.doc> 

Figure 7.6: This rubric will be used to assess a final, group written, in-depth case analysis. It includes 
the three frameworks referenced in the supplemental link provided above. 



228 CHAPTER 7. COURSE PROCEDURES 

Rubric for Good Computing / Social Impact Statements Reports 

This rubric provides assessment criteria for the Good Computing Report activity that is based on the Social 
Impact Statement Analysis described by Chuck Huff at www.computingcases.org. (See link) Students take a 
major computing system, construct the socio-technical system which forms its context, and look for potential 
problems that stem from value mismatches between the computing system and its surrounding socio-technical 
context. The rubric characterizes less than adequate, adequate, and exceptional student Good Computing 
Reports. 

Good Computing Report Rubric 

This media object is a downloadable file. Please view or download it at 
<CE_FinalRubric_S06.doc> 

Figure 7.7: This figure provides the rubric used to assess Good Computing Reports in Computer Ethics 
classes. 



Computing Cases provides a description of a Social Impact Statement report that is closely related to the 
Good Computing Report. Value material can be accessed by looking at the components of a Socio- Technical 
System and how to construct a Socio- Technical System Analysis. 4 

Business Ethics Midterm Rubric Spring 2008 

This media object is a downloadable file. Please view or download it at 
<Midterm Rubric Spring 2008.doc> 

Figure 7.8: Clicking on this link will open the rubric for the business ethics midterm exam for spring 
2008. 



7.1.5 

Insert paragraph text here. 

7.1.6 Study Materials for Business Ethics 

This section provides models for those who would find the Jeopardy game format useful for helping students 
learn concepts in business ethics and the environments of the organization. It incorporates material from 
modules in the Business Course and from Business Ethics and Society, a textbook written by Anne Lawrence 
and James Weber and published by McGraw-Hill. Thanks to elainefitzgerald.com for the Jeopardy template. 
Jeopardy: Business Concepts and Frameworks 
[Media Object] 5 



4 http:// www.computingcases.org 

5 This media object is a downloadable file. Please view or download it at 
< Jeopardy lTemplate.pptx> 



229 

[Media Object] 6 

7.2 Realizing Responsibility Through Class Participation 7 

7.2.1 Module Introduction 

Class attendance is a normal part of every college course. In the past, attendance was left up to the individual 
student. Now universities, adopting the responsibility of being local parents, require that teachers monitor 
class attendance closely by taking attendance each class and reporting students who are chronically absent. 
This makes use of what are termed "compliance systems": minimum standards of acceptable attendance are 
established and communicated to students, behavior is regularly monitored, and non-compliance is punished. 
In compliance approaches, the focus is placed on maintaining the minimum level of behavior necessary to 
avoid punishment. But this leaves unmentioned higher levels and standards of conduct. Students who miss 
more than X number of classes are punished by having points subtracted from their overall grade. But 
what constitutes outstanding attendance or, more positively, excellent participation? This module uses class 
attendance as an occasion to teach the different concepts of moral responsibility. After outlining blame 
responsibility and excuse-making, it explores responsibility as a virtue or excellence. Being absent creates its 
own responsibilities (1) to the teacher (you are responsible for finding out the material covered and learning 
it on your own), (2) to your classmates (what did your class group do in your absence and how will you 
reintegrate yourself into the group as an equal participant), and (3) to yourself (what habits will you change 
to improve your participation in class). 

7.2.2 Where excuses come from 

Understanding Morally Legitimate Excuses 

• The table below lists characteristics of what ethicists call "capacity responsibility." These conditions- 
presented by F.H. Bradley-describe when we can associate an agent with an action for the purposes 
of moral evaluation. They consist of (1) self-sameness, (2) moral sense, and (3) ownership. 

• Self-sameness bases responsibility on the ability to maintain an identity over time; you must be the 
same person at the moment of accountability that you were when you performed the action. You 
cannot be blamed for actions performed by somebody else. So Jorge cannot be blamed for classes 
missed by Jose. Your professor should be held responsible for taking accurate attendance and not 
marking you absent when you are actually in class. 

• The moral sense condition requires that you have the capacity to appreciate and comply with moral 
directives. This includes certain perceptual sensitivities (the ability to recognize elements of a situ- 
ation that are morally relevant), emotional responses (that you respond to moral elements with the 
appropriate emotion), and the ability to shape action in accordance with moral standards. Those who 
lack moral sense, whether temporarily as with children or because of psychological limitations as with 
psychopaths are non- responsible rather than guilty or innocent. They simply lack the general capacity 
to be held accountable. 

• Ownership gets down to the specifics of a given situation. Did factors in the situation compel you 
to miss class? Did you miss class because you lacked certain crucial bits of knowledge? Why were 
you unable to attend class and can this "why" be translated into a morally legitimate excuse. In 
excusing an action, you "disown" it. There are three ways to do this: a) by showing unavoidable 
and conflicting obligations, b) by pointing to compelling circumstances, or c) by citing 
excusable ignorance. 



6 This media object is a downloadable file. Please view or download it at 
<Jeopardy2.pptx> 

7 This content is available online at <http://cnx.Org/content/ml3788/l.6/>. 



230 



CHAPTER 7. COURSE PROCEDURES 



Formally defined, compulsion is the production in an individual of a state of mind or body against 
the actual will. Sickness is a state of mind and body that could compel you to stay at home even 
though you want to come to class and take the test. Having a flat tire on the way to school could also 
produce a state of body (being stuck at the side of the road) against actual will (driving to class in 
order to take the test). With compulsion, the key test is whether the compelling circumstances were 
under your control. Did your tire go flat because you postponed getting a new set of tires, even when 
it was clear that you needed them? Are you sick and in bed now because you overdid it at the party 
last night? If the compelling circumstances resulted from actions that you performed voluntarily in 
the past, then you are still responsible. 

You also need to have the knowledge necessary to act responsibly in a given situation. Imagine that 
your class was being taught by a professor who claimed to be a CIA agent. He would repeatedly change 
the times and locations of class meetings at the last minute to keep from being discovered by enemy 
spies. Not knowing where (or when) the next class would be held would make it impossible to attend. 
Here you would get off the hook for missing class because of excusable ignorance. But suppose changes 
in class schedule were announced during class by the professor, but you were absent on that day. You 
are now responsible for your ignorance because you should have found out what was covered while you 
were absent in the past. In other words, your ignorance in the present was caused by your neglecting 
to find things out in the past. You are responsible because voluntary actions in the past (and inaction) 
caused the state of ignorance in the present. 

The table below provides sample excuses given by students for absences. These are correlated with 
conditions of capacity responsibility such as ignorance and compulsion. Correlating excuses with 
conditions of imputability is one thing. Validating them is something else, and none of these excuses 
have been validated. 

Here are some more typical excuses offered by students for missing class. Try correlating them with 
the conditions of imputability to which they tacitly appeal: (1) I missed your class because I needed 
the time for studying for a test in another class. (2) I missed class because the electricity went out 
during the night and my electric alarm clock didn't go off on time. (3) I planned on going to class but 
got called into work at the last minute by my boss. In all these cases, you have missed class and have 
a reason. Can your reason be correlated with ignorance or compulsion? Were you negligent, careless, 
or reckless in allowing these conditions of ignorance and compulsion to develop? 

Excuses (and blame) emerge out of a nuanced process of negotiation. Much depends on trust. Your 
professor might excuse you for missing a class at the end of the semester if your attendance up to that 
point had been exemplary. He could, on this basis, treat the absence as an exception to an otherwise 
exemplary pattern of attendance and participation. 

But you may have trouble getting off the hook this time, if there have been several previous absences, 
because the new absence falls into a pattern of poor participation accompanied by lame excuses. 
Excuse negotiation (and blame responsibility) occur over the background of other values such as trust 
and honesty. 



Retroactive Responsibility Table 



Retroactive Responsibility 



Excuse 



Excuse Statement (Some Ex- 
amples) 



continued on next page 



231 





1. Conflicts within a role respon- 
sibility and between different role 
responsibilities. 


I have a special project due in an- 
other class and finishing it con- 
flicts with attending your class. 




2. Overly determining situational 
constraints: conflicting interests. 


I am interviewing for a position 
after I graduate, and I must be 
off the island for a few days. 




3. Overly determining situational 
constraints: resource constraints 


My car had a flat tire. My 
babysitter couldn't come so I had 
to stay home with my child. My 
alarm clock didn't go off because 
of a power outage. 




4. Knowledge limitations 


Class was rescheduled, and I was 
unaware of the change. 




5. Knowledge limitations 


I didn't know the assignment for 
class so I came unprepared. (Not 
an excuse for missing class) 



Table 7.1: Correlation of condition of imputabiloity with common excuses. 

Exercise 1: Provide a Morally Justifiable Excuse for Missing Class 

• Offer an honest and responsible ethical assessment of the reason you were unable to carry out your 
role responsibility for coming to class. Note that the default here is attending class and any departure 
from the default (i.e., missing class) requires a moral justification. 

• Begin by examining whether your action can be classified as an excuse arising out of compulsion or 
ignorance. 

• Your absence may not be morally excusable. In this case, you cannot excuse your absence but still 
must explain it. 

• Remember that, following Aristotle, you must show that your action was done under and because of 
compulsion or under and because of ignorance. In other words, you must show that it did not arise 
from past negligence or recklessness. 



7.2,3 Proactive/Prospective Responsibility 

Principle of Responsive Adjustment 

• Responsibility for both good and bad things often emerges as a pattern exhibited by a series of action. 
If you miss one class after establishing a pattern of good attendance and active participation, then 
your teacher will look for something exceptional that prevented you from doing what you habitually 
do. But if one absence falls into a series with other absences, then this reveals a pattern and your 
teacher begins to classify you as someone who is chronically absent. 

• So, it is not enough to offer a moral excuse to get "off the hook" for your absence. Expressing remorse, 
guilt, and regret do not substitute for taking active measures to avoid repeating the wrongful act. 
These changes or responsive adjustments clue others in to whether you have learned from your past 
mistakes. What happened in the past was bad and you regret it; but are you willing to make the 
necessary changes in your future conduct to avoid repetition of the bad act? 

• This is expressed by the "Principle of Responsive Adjustment" (or PRA). Stated negatively, 
failure to take measures to prevent past excusable wrongs from reoccurring in the future leads to a 
reevaluation of these past actions. Failure to responsively adjust shows that the past action belongs 
to context of similar bad actions indicating a bad habit or bad character. This, in turn, leads to a 



232 CHAPTER 7. COURSE PROCEDURES 

reevaluation of the past act; what when taken in isolation was not blameworthy becomes blameworthy 
when inserted into this broader context. Showing an unwillingness to learn from the past betrays 
entrenched attitudes of negligence, carelessness, or recklessness. (See Peter A. French, Corporate 
and Collective Responsibility) 

Responsibility as a Virtue 

• Responsibility can be reconfigured as a virtue or excellence. 

• The table below describes the characteristics of a preventive stance where we begin by identifying 
potential wrongs and harms. Once we identify these then we take serious measures to prevent them 
from occurring. 

• Finally, responsibility as a virtue opens up the horizon of the exemplary. Pursuing excellence requires 
our identifying opportunities to go beyond preventing harm to realizing value. 

• In this context, class attendance becomes class participation. As was said in the introduction, missing 
a class creates a series of new tasks that arise out of your commitment to excellence in participation. 
These include the following: 

• 1. What was covered while you were absent? Or better, if you know in advance that you are going to 
miss a class, what will be covered? How can you cover this material on your own? What can you do, 
proactively, to stay with the class during your absence? 

• 2. How will your absence impact the rest of the class (especially those in your class group), and what 
can you do to minimize any harmful effects? Here you should notify your team members that you are 
going to miss class and develop plans for maintaining your equal participation in the group and class 
during and after your absence. 

• 3. In accordance with the Principle of Responsive Adjustment, what changes are you making to avoid 
absences in the future or-putting it as positively as possible-to achieve a level of excellence in class 
participation? 

• Note how all these items focus on improvement or betterment rather than "making up." As Dewey 
recognizes, the real function of moral responsibility is to take the lessons we learn from the past and 
use them to improve ourselves. 



233 



Responsibility as a Virtue or Proactive Re- 
sponsibility 


Characteristic 


Proactive Response 


Diffuse blame avoidance 


Avoid trying to diffuse 




strategies 


the blame for missing 
class on some other per- 
son or situation. For ex- 
ample, "I couldn't come 
to class because I had 
a project due in an- 
other class" is not a 
morally legitimate ex- 
cuse because it places 
the blame on the other 
class. You have not 
taken responsibility for 
your absence. 


Design responsibili- 


If you fail to partici- 




ties with overlapping 


pate in a group activ- 




domains 


ity, describe the group's 
"Plan B," i.e., how they 
worked around your ab- 
sence. 


Extend the scope and 


Describe how you found 




depth of knowledge. 


out what was covered in 
class and document how 
you have learned this 
material 


Extend power and con- 


Describe the measures 




trol 


you have taken to elim- 
inate the "responsibility 
gap" between you and 
your work group. For 
example, how did you 
"make up" for not par- 
ticipating in the activ- 
ity held in the class you 
missed. 


Adopt a proactive prob- 


Describe what measures 




lem solving/preventive 


you have taken to avoid 




approach for the future 


missing classes in the fu- 
ture. 



Table 7.2 



Guidelines for Avoiding Absences 

1. Build redundancy into your schedule. Many students develop schedules that are "tightly-coupled." 
This means that failures or breakdowns cannot be isolated; then tend to flow over into other areas 
producing a cascading disaster. A co-worker calls in sick, and your boss calls you in during the time 
you have a class. You miss one class and fail to study for another. (The time you set aside for study has 
been taken up by this unexpected job demand.) You have been working so hard to catch up that you 



234 CHAPTER 7. COURSE PROCEDURES 

catch a cold. Now everything becomes that much harder because you are not working to full capacity. 
The lesson here is to set up your schedule from the beginning with a certain amount of flexibility built 
in. This could be as simple as taking four instead of five classes or working 10 instead of 20 hours per 
week. 

2. Look for incentives or motives to come to class. One important incentive is that you may get a better 
grade. Teachers tend to know students who come to class better; they consider them more responsible 
and more committed. 

3. Get proactive when you return. Instead of asking the professor, "Did we do anything important while 
I was absent?" consult the syllabus and a classmate to find out what you missed. Then check your 
understanding with the professor. "My understanding is that you discussed moral responsibility with 
the class and applied the framework to a case. Is this correct?" Instead of asking the professor, "What 
should I do to make up for what I missed?" come with your own plan. Show that you have taken 
responsibility for your absence by getting proactive and planning the future around realizing value. 

4. Absences have an impact on your fellow students as much as on you or your instructor. If you are 
working in groups, find out from your peers what was covered. If your group is depending on your 
completing a task for the class you are missing, try to develop a "work-around." ("I won't be in class 
tomorrow but I am sending you my part of the group assignment via email attachment.") Let your 
team know what is happening with you and make sure that you keep up on all your commitment and 
responsibilities to the group. 

Exercise 2: Getting Proactive about your absence 

• Develop a plan for "getting back into the loop." What are you going to do to cover the material and 
activities you have missed? 

• Get Preventive. Describe what you are going to do now to avoid absences in the future. 

• Shoot for the ideal. What can you do-above and beyond class attendance-to realize exemplary partic- 
ipation in your ethics class. 

7.2,4 Conclusion 

Exercise #3: Getting and Staying Honest 

• Below is a template that you need to duplicate, fill out, and place in the class attendance file that will 
be on the desk in front of class. 

• Duplicate and sign the honesty pledge at the end of this module. 

• Students often wish to provide evidence documenting their claims regarding their absences. You may 
do this, but remember that this is neither required nor in the spirit of prospective responsibility. 

• Furthermore, be aware that you are not to provide confidential information such as personal health 
information or student id numbers or social security numbers. Health issues are to be referred to 
generically by saying something like, "I was unable to come to class Tuesday because of health reasons." 

1. Class Missed (Day of week and date): 

2. Material covered during class: 

3. Reason for missing class (please do not provide confidential information): 

4. Action Plan for Absence: How you intend to take responsibility for the material covered while you were 
absent; How you intend to make reparations to your group for not participating in group learning activities 
for the class you missed; 

5. How do you plan to avoid absences in the future: 

Honesty Pledge 

• To realize the value of honesty, you will make the following affirmation: 



235 

• The information I have provided above is truthful, the excuses I have ennumerated rig- 
orously examined from a moral point of view, and the responsive commitments I have 
made above are serious, and I will take active and realistic efforts to carry them out. 

Signature: 

7.2,5 Bibliography 

1. Aristotle. Nichomachean Ethics, Book 3, Chapters 1-3. 

2. Bradley, F. H. (1927/1963). Essay I: The vulgar notion of responsibility in connexion withe 
theories of free-will and necessity. Ethical Studies. Oxford: Oxford University Press, 3-4. 

3. Davis, M. (1998) Thinking Like an Engineer: Studies in the Ethics of a Profession. Oxford, 
UK: Oxford University Press: 119-156. 

4. Fingarette, H. (1971) Criminal Insanity. University of California Press, Berkeley, CA: 171. 

5. French, P.A. (1984) Collective and Corporate Responsibility. Columbia University Press: New 
York, NY. 

6. Jackall, R. (1988) Moral Mazes: The World of Corporate Managers. Oxford, UK: Oxford 
University Press. 

7. Ladd, J. (1991) Bhopal: An essay on moral responsibility and civic virtue. Journal of Social Phi- 
losophy, 32(1). 

8. May, L. (1987) The Morality of Groups: Collective Responsibility, Group-Based Harm, and 
Corporate Rights. University of Notre Dame Press: Notre Dame, IN. 

9. May, L. (1994) The Socially Responsive Self: Social Theory and Professional Ethics. Uni- 
versity of Chicago Press: Chicago, IL. 

10. Pritchard, M. (1996) Reasonable Children: Moral Education and Moral Learning. University 
of Kansas Press, Lawrence, KS. 

11. Pritchard, M. (1998) "Professional responsibility: focusing on the exemplary", Science and Engi- 
neering Ethics, Vol 4, pp 215-234. 

12. Pritchard, M. (2006) Professional Integrity: Thinking Ethically. University of Kansas Press, 
Lawrence, KS. 

13. Stone, C. D. (1975) Where the Law Ends: The Social Control of Corporate Behavior. 
Prospector Heights, IL: Waveland Press, INC. 



236 



INDEX 



Index of Keywords and Terms 

Keywords are listed by the section with that keyword (page numbers are in parentheses). Keywords 
do not necessarily appear in the text of the page. They are merely associated with that section. Ex. 
apples, § 1.1 (1) Terms are referenced by the page they appear on. Ex. apples, 1 



A Academic Integrity, § 7.2(229) 
Assessment, § 7.1(225) 

B Business, § 2.3(40), § 2.4(44), § 3.2(61), 
§ 3.3(70), § 3.4(80), § 6.2(220) 
Business and Professional Ethics, § 5.5(201 
Business Ethics, § 2.4(44), § 3.1(53), § 3.5 
§ 4.1(99), § 4.2(111), § 4.4(128), § 5.1(143), 
§ 5.4(179) 

C Case Analysis, § 5.3(174) 
CECO, § 4.4(128) 
Class Attendance, § 7.2(229) 
Code of Ethics, § 4.3(122) 
Codes of Ethics, § 4.2(111) 
Collaborative Learning, § 1.4(17) 
Compliance, § 4.2(111) 
Computer, § 5.2(165) 
Computer Ethics, § 1.1(1), § 2.2(29), 
§ 5.1(143), § 5.4(179) 
Computers, § 5.6(203) 
Computing, § 5.3(174) 
Corporate, § 3.3(70) 

Corporate governance, § 2.3(40), § 3.1(53), 
§ 3.2(61), § 4.4(128) 

Corporate Moral Responsibility, § 4.1(99) 
Corporations, § 4.1(99) 

D Debating, § 6.2(220) 
Decision, § 5.2(165) 
Decision Making, § 2.2(29) 
Decision-making, § 2.3(40), § 4.2(111) 
Deontology, § 2.1(23) 
Duty, § 2.1(23) 

E EAC Toolkit, § 3.1(53), § 4.1(99), § 5.1(143), 
§ 5.4(179) 

Engineering, § 2.4(44), § 4.3(122) 
Engineering Ethics, § 1.1(1), § 2.1(23), 
§ 2.2(29), § 6.1(211) 
Ethical Dilemma, § 1.1(1) 
Ethical Leadership, § 2.3(40) 



Ethical Theory, § 1.1(1), § 1.2(5), § 2.1(23) 

Ethical Values, § 1.4(17) 

Ethics, § 1.1(1), § 1.3(12), § 1.4(17), § 2.1(23), 

§ 2.2(29), § 2.3(40), § 2.4(44), § 3.2(61), 

§ 3.3(70), § 3.4(80), § 3.5(88), § 4.1(99), 

§ 4.2(111), § 4.3(122), § 4.4(128), § 4.5(132), 

§ 5.1(143), § 5.2(165), § 5.3(174), § 5.4(179), 

§ 5.6(203), § 6.2(220), § 7.1(225), § 7.2(229) 

Ethics Bowl, § 2.2(29), § 6.1(211), § 6.2(220) 

Ethics Case Analysis, § 6.1(211) 

Ethics in Decision-Making, § 6.1(211) 

Ethics of Risk, § 3.5(88) 

Ethics Officer, § 4.4(128) 

Exams, § 7.1(225) 

G Group Projects, § 7.1(225) 

H Honesty, § 7.2(229) 

Humanities, § 4.5(132), § 5.1(143), § 5.4(179), 
§6.1(211) 

I Incident at Morales, § 3.4(80) 

J Job Candidacy, § 4.5(132) 

M Moral Career, § 3.2(61) 
Moral Ecology, § 3.2(61) 
Moral Exemplars, § 1.3(12) 
Moral Psychology, § 1.3(12) 
Moral Responsibility, § 3.1(53) 

P Pirate Creed or Code, § 4.3(122) 
Professional, § 3.4(80) 
Professional Ethics, § 1.2(5), § 4.5(132) 



R Responsibility, § 3.3(70), 
Right, § 2.1(23) 
Rubric, § 7.1(225) 



3.4(80), § 7.2(229) 



Safety, § 5.3(174) 

Social, § 3.3(70) 

Social Impacts, § 2.4(44) 

Social Responsibility, § 2.3(40), § 5.5(201) 

Socio-technical analysis, § 2.2(29) 



INDEX 



237 



Socio- Technical System, § 2.4(44) 
Socio-technical systems, § 5.6(203) 
Statement of Value, § 7.2(229) 



T Technical Impacts, i 
Template, § 4.1(99) 
Toolkit, § 4.1(99) 



2.4(44) 



V Value, § 4.2(111), § 7.2(229) 
Values, § 5.5(201) 
Values-Based, § 4.2(111) 
Virtue Ethics, § 1.2(5), § 1.3(12) 

W Work Teams, § 1.4(17) 



238 ATTRIBUTIONS 

Attributions 

Collection: Business Ethics 

Edited by: William Frey 

URL: http://cnx.org/content/coll0491/l-9/ 

License: http://creativecommons.Org/licenses/by/2.0/ 

Module: "Theory Building Activities: Mountain Terrorist Exercise" 

By: William Frey 

URL: http://cnx.org/content/ml3764/l-ll/ 

Pages: 1-5 

Copyright: William Frey 

License: http://creativecommons.Org/licenses/by/2.0/ 

Module: "Theory-Building Activities: Virtue Ethics" 

By: William Frey 

URL: http://cnx.org/content/ml3755/L13/ 

Pages: 5-12 

Copyright: William Frey 

License: http://creativecommons.org/licenses/by/3-0/ 

Module: "Moral Exemplars in Business and Professional Ethics" 

By: William Frey, Jose A. Cruz-Cruz 

URL: http://cnx.org/content/ml4256/l-10/ 

Pages: 12-17 

Copyright: William Frey, Jose A. Cruz-Cruz 

License: http://creativecommons.org/licenses/by/3-0/ 

Module: "Ethics of Team Work" 

By: William Frey 

URL: http://cnx.org/content/ml3760/l-10/ 

Pages: 17-21 

Copyright: William Frey 

License: http://creativecommons.org/licenses/by/3-0/ 

Module: "Ethical Rights for Working Engineers and Other Professionals" 

By: William Frey 

URL: http://cnx.org/content/ml5554/l-l/ 

Pages: 23-29 

Copyright: William Frey 

License: http://creativecommons.Org/licenses/by/2.0/ 

Based on: Theory-Building Activities: Rights 

By: William Frey 

URL: http://cnx.org/content/ml3758/L4/ 

Module: "Three Frameworks for Ethical Decision Making and Good Computing Reports" 

By: William Frey 

URL: http://cnx.org/content/ml3757/l-17/ 

Pages: 29-40 

Copyright: William Frey 

License: http://creativecommons.Org/licenses/by/2.0/ 



ATTRIBUTIONS 239 

Module: "Values-Based Decision-Making in Gilbane Gold" 

By: William Frey 

URL: http://cnx.org/content/ml5783/l-4/ 

Pages: 40-44 

Copyright: William Frey 

License: http://creativecommons.Org/licenses/by/2.0/ 

Module: "Socio- Technical Systems in Professional Decision Making" 

By: William Frey 

URL: http://cnx.org/content/ml4025/l-9/ 

Pages: 44-52 

Copyright: William Frey 

License: http://creativecommons.Org/licenses/by/2.0/ 

Module: "A Short History of the Corporation" 

By: William Frey, Jose A. Cruz-Cruz 

URL: http://cnx.org/content/ml7314/Ll/ 

Pages: 53-61 

Copyright: William Frey 

License: http://creativecommons.Org/licenses/by/2.0/ 

Based on: EAC Toolkit - Student Module Template 

By: Jose A. Cruz-Cruz, William Frey 

URL: http://cnx.org/content/ml4291/l-9/ 

Module: "Moral Ecologies in Corporate Governance" 

By: William Frey 

URL: http://cnx.org/content/ml7353/l-6/ 

Pages: 61-70 

Copyright: William Frey 

License: http://creativecommons.Org/licenses/by/2.0/ 

Based on: EAC Toolkit - Student Module Template 

By: Jose A. Cruz-Cruz, William Frey 

URL: http://cnx.org/content/ml4291/l-9/ 

Module: "Three Views of CSR (Corporate Social Responsibility)" 

By: William Frey, Jose A. Cruz-Cruz 

URL: http://cnx.org/content/ml7318/l-6/ 

Pages: 70-80 

Copyright: William Frey 

License: http://creativecommons.Org/licenses/by/2.0/ 

Based on: EAC Toolkit - Student Module Template 

By: Jose A. Cruz-Cruz, William Frey 

URL: http://cnx.org/content/ml4291/l-9/ 

Module: "Theory Building Activities: "Responsibility and Incident at Morales"" 

By: William Frey 

URL: http://cnx.org/content/ml5627/l-5/ 

Pages: 80-88 

Copyright: William Frey 

License: http://creativecommons.org/licenses/by/3-0/ 



240 ATTRIBUTIONS 

Module: "Ethical Issues in Risk Management for Business" 

By: William Frey 

URL: http://cnx.org/content/ml9085/l-l/ 

Pages: 88-97 

Copyright: William Frey 

License: http://creativecommons.Org/licenses/by/2.0/ 

Based on: EAC Toolkit - Student Module Template 

By: Jose A. Cruz-Cruz, William Frey 

URL: http://cnx.org/content/ml4291/l-9/ 

Module: "Different Approaches to Corporate Governance" 

By: William Frey, Jose A. Cruz-Cruz 

URL: http://cnx.org/content/ml7367/l-l/ 

Pages: 99-111 

Copyright: William Frey 

License: http://creativecommons.Org/licenses/by/2.0/ 

Based on: EAC Toolkit - Student Module Template 

By: Jose A. Cruz-Cruz, William Frey 

URL: http://cnx.org/content/ml4291/l-9/ 

Module: "Developing Ethics Codes and Statements of Values" 

By: William Frey, Jose A. Cruz-Cruz 

URL: http://cnx.org/content/ml4319/l-9/ 

Pages: 111-122 

Copyright: William Frey, Jose A. Cruz-Cruz 

License: http://creativecommons.Org/licenses/by/2.0/ 

Module: "Pirate Code for Engineering Ethics" 

By: William Frey 

URL: http://cnx.org/content/ml3849/l-10/ 

Pages: 122-128 

Copyright: William Frey 

License: http://creativecommons.org/licenses/by/2-0/ 

Module: "Corporate Ethics Compliance Officer Report" 

By: William Frey 

URL: http://cnx.org/content/ml8646/l-l/ 

Pages: 128-132 

Copyright: William Frey 

License: http://creativecommons.org/licenses/by/2-0/ 

Based on: EAC Toolkit - Student Module Template 

By: Jose A. Cruz-Cruz, William Frey 

URL: http://cnx.org/content/ml4291/l-9/ 

Module: "Being an Ethical Job Candidate" 

By: William Frey 

URL: http://cnx.org/content/ml4468/l-7/ 

Pages: 132-141 

Copyright: William Frey 

License: http://creativecommons.Org/licenses/by/2.0/ 



ATTRIBUTIONS 241 

Module: "Biomatrix Case Exercises - Student Module" 

By: William Frey, Jose A. Cruz-Cruz 

URL: http://cnx.org/content/ml5187/l-8/ 

Pages: 143-165 

Copyright: William Frey, Jose A. Cruz-Cruz 

License: http://creativecommons.org/licenses/by/3-0/ 

Based on: Toysmart Case Exercises - Student Module 

By: Jose A. Cruz-Cruz, William Frey 

URL: http://cnx.org/content/ml4789/Ll/ 

Module: "Gray Matters for the Hughes Aircraft Case" 

By: William Frey 

URL: http://cnx.org/content/ml4036/L7/ 

Pages: 165-174 

Copyright: William Frey 

License: http://creativecommons.Org/licenses/by/2.0/ 

Module: "Case Analysis Module: Therac-25" 

By: William Frey 

URL: http://cnx.org/content/ml3765/l-l/ 

Pages: 174-179 

Copyright: William Frey 

License: http://creativecommons.org/licenses/by/2-0/ 

Module: "Toysmart Case Exercises - Student Module" 

By: William Frey, Jose A. Cruz-Cruz 

URL: http://cnx.org/content/ml4789/l-4/ 

Pages: 179-201 

Copyright: William Frey 

License: http://creativecommons.org/licenses/by/3-0/ 

Based on: EAC Toolkit - Student Module Template 

By: Jose A. Cruz-Cruz, William Frey 

URL: http://cnx.org/content/ml4291/l-9/ 

Module: "Ethics and Laptops: Identifying Social Responsibility Issues in Puerto Rico" 

By: William Frey, Jose A. Cruz-Cruz 

URL: http://cnx.org/content/ml4257/l-3/ 

Pages: 201-203 

Copyright: William Frey, Jose A. Cruz-Cruz 

License: http://creativecommons.Org/licenses/by/2.0/ 

Module: "Case Analysis and Presentation: Machado" 

By: William Frey 

URL: http://cnx.org/content/ml3818/l-2/ 

Pages: 203-209 

Copyright: William Frey 

License: http://creativecommons.org/licenses/by/2-0/ 

Module: "Practical and Professional Ethics Bowl Activity: Follow-Up In-Depth Case Analysis" 

By: William Frey 

URL: http://cnx.Org/content/ml3759/l.12/ 

Pages: 211-220 

Copyright: William Frey 

License: http://creativecommons.Org/licenses/by/2.0/ 



242 ATTRIBUTIONS 

Module: "Ethics Bowl: Cases and Score Sheets" 

By: William Frey 

URL: http://cnx.org/content/ml3852/l-6/ 

Pages: 220-224 

Copyright: William Frey 

License: http://creativecommons.Org/licenses/by/2.0/ 

Module: "Rubrics for Exams and Group Projects in Ethics" 

By: William Frey 

URL: http://cnx.org/content/ml4059/L9/ 

Pages: 225-229 

Copyright: William Frey 

License: http://creativecommons.org/licenses/by/3-0/ 

Module: "Realizing Responsibility Through Class Participation" 

By: William Frey, Jose A. Cruz-Cruz 

URL: http://cnx.org/content/ml3788/L6/ 

Pages: 229-235 

Copyright: William Frey, Jose A. Cruz-Cruz 

License: http://creativecommons.org/licenses/by/2-0/ 



Business Ethics 

Business Ethics is a derived copy from the Corporate Governance course previously published in Connexions. 
While many courses using this title place emphasis on applying classical philosophical and ethical theory, this 
course's approach is decidedly interdisciplinary and practical. It is not designed as a socio-humanistic elective, 
a service philosophy course, or even an applied philosophical ethics course but as a laboratory, skills-based 
course where students develop, practice, and refine decision-making and problem-solving strategies that they 
will carry with them into the world of business practice. Emphasis has been placed on responding to the 
four ethical themes identified by the AACSB ethics task force: Ethical Leadership, Ethical Decision-Making, 
Social Responsibility, and Corporate Governance. Modules include (1) theory building activities (responsi- 
bility, rights, virtue), (2) problem specification frameworks emphasizing socio-technical system building and 
analogies with design, (3) specific modules responding to AACSB ethics themes (moral ecologies, corporate 
social responsibility, corporate governance, and a history of the modern corporation) and (4) modules that 
provide the course with a capstone, integrative experience (Business Ethics Bowl, Social Impact Statement 
Reports, and Corporate Ethics Compliance Officer Reports). While a quick glance shows that this collec- 
tion holds more modules than can possibly be covered in a single semester, this approach gives the user 
flexibility as to the method used for integrating ethics into the business administration curriculum. Modules 
can be recombined into different standalone courses such as business ethics, business/government/society, 
or environment of organizations. Since each module can be covered independently, they can be integrated 
into the business administration curriculum as specific interventions in mainstream business courses in areas 
like accounting, finance, management, information systems, human resources or office administration. (In 
fact many have been written for and tested in these circumstances.) Business Ethics has been developed 
through the NSF-funded project, "Collaborative Development of Ethics Across the Curriculum Resources 
and Sharing of Best Practices," NSF SES 0551779. 



About Connexions 

Since 1999, Connexions has been pioneering a global system where anyone can create course materials and 
make them fully accessible and easily reusable free of charge. We are a Web-based authoring, teaching and 
learning environment open to anyone interested in education, including students, teachers, professors and 
lifelong learners. We connect ideas and facilitate educational communities. 

Connexions's modular, interactive courses are in use worldwide by universities, community colleges, K-12 
schools, distance learners, and lifelong learners. Connexions materials are in many languages, including 
English, Spanish, Chinese, Japanese, Italian, Vietnamese, French, Portuguese, and Thai. Connexions is part 
of an exciting new information distribution system that allows for Print on Demand Books. Connexions 
has partnered with innovative on-demand publisher QOOP to accelerate the delivery of printed course 
materials and textbooks into classrooms worldwide at lower prices than traditional academic publishers.